GCC ‘could see increase in mergers and acquisitions’

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Mergers and acquisitions (M&A) in many sectors across Bahrain and the GCC region are expected to go up significantly, according to a KPMG expert, citing the recent increase in the number of acquisitions of technology-based companies by non-technology players, mostly within the telecom and financial services sectors as a growth driver.

KPMG in Bahrain deal advisory partner Nicolas Ribollet explained that the rise in takeovers is in line with economic diversification plans in the GCC.

“M&A is considered a catalyst for growth and transformation within the marketplace, both at a global and national level. Digital transformation is influencing how businesses are evolving, and consumers are increasingly expecting a user-friendly experience in the kingdom, the GCC region and globally,” he added.

“This means, to stay competitive, companies must consider new business models to be able to adapt with the fast-paced economy. A quick way to achieve this is to buy into existing capabilities.

Mr Ribollet was speaking during a webinar for business leaders across key sectors in the marketplace in Bahrain, to discuss a pragmatic approach towards M&A related activities.

Also discussed during the webinar were the findings of KPMG’s ‘Navigating complex M&A’ survey report.

The official believes the heightened interest in consolidation stems from the business landscape, both locally and globally, becoming more complex because of the various market forces and trends.

“Currently, organisations are considering ‘deal-making’ as an efficient option to obtaining and expanding capabilities and staying competitive, without the hassle of having to build skills and capabilities ground up.”

Camille Geadah, deal advisory director at KPMG in Bahrain, elaborated on the future potential of M&A and said that the importance of Environmental, Social and Governance (ESG) factors is increasing within the modern world, and rapidly becoming a standard expectation from investors.

“Bahrain has recently joined the efforts and is collaborating with the other Gulf countries’ ESG and specifically ‘Green’ initiatives, in alignment with their 2060 ‘net-zero’ commitments. This will require direct involvement from the private sector as companies will have to acquire the right technology and capabilities to monitor and report on their carbon emissions,” Ms Geadah added.

“Doing so now and benefiting from ‘first mover’ advantage before the ‘Green’ agenda becomes a compliance requirement, will give the buyer/seller a competitive advantage in the deals’ world where ESG is widely being recognised as the new intangible.”