LEGAL PERSPECTIVE
Reasons to be cheerful Though 2020 has confronted companies with serious and unexpected challenges, it has come with opportunities for companies to expand through M&A, buyouts, and the Abraham Accords. Here, Jonathan Noble, Local Partner, AMERELLER, a leading law firm, describes the regional environment for such opportunities, highlighting important considerations and factors to keep in mind when taking action.
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he UAE and broader MENA re g i o n h a v e l o n g b e e n recipients of foreign direct investment (FDI) via strong international ties with investors and businesses in North America, Europe, and Asia. While the multiple shocks of 2020 may have shaken investor confidence around the world, the MENA region will continue to be a destination for investment and growth. In 2019, the UAE registered the fastest annual FDI growth rate in the MENA region with total inbound investment of roughly USD 3.4 billion1. For 2020, the
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MENA region is likely to see declines of 30-45% in FDI inflows to the region. As a service provider of choice for European, Japanese, and American multinationals in the Middle East, we have had a front row seat to how the multiple hits of 2020 have impacted business. Even with the gloomy news of geopolitical uncertainty, the COVID-19 p a n d e m i c , a n d o i l p r i c e s h o c ks - our outlook is largely positive. This is supported by positive trends in the M&A arena, and the potentially game changing breakthrough of the Abraham Accords.
Banking and Finance news in the MEA market
Fears of M&A’s Demise are Premature but the Road Ahead May Still be Bumpy Despite the headwinds, some international companies have been active acquirers in the Middle East in 2020. While deal value and volume decreased in the Middle East in H1, this trend may have started to reverse. In most cases, companies identified acquisition targets before the onset of the pandemic and are now consummating deals despite the prevailing uncertainty. We have seen fewer “opportunistic” deals than we initially anticipated as the pandemic
