Cross-Border M&A in the GCC: Working with International Buyers

Understanding the dynamics of cross-border transactions in the GCC, from international buyer motivations to practical considerations for business owners.

Cross-Border M&A in the GCC: Working with International Buyers

Cross-border transactions represent a significant portion of GCC M&A activity. Understanding the dynamics of international deals helps business owners prepare for and navigate these transactions successfully.

Cross-Border Activity: The Scale

According to EY MENA M&A Insights 2024, cross-border transactions represented 52% of total deal volume and 74% of total deal value in the MENA region. These figures highlight the substantial role international buyers play in regional M&A.

The same report notes that the UAE attracted 96 inbound deals valued at $7.6 billion, making it the primary destination for international acquirers entering the GCC market.

Why International Buyers Target the GCC

Market Entry Motivations

Access to growing regional markets
Strategic positioning in the Middle East
Diversification from home markets
Following global customers to the region

Strategic Asset Acquisition

Acquiring local market knowledge
Gaining established customer relationships
Accessing regulatory approvals and licenses
Acquiring skilled local management teams

Growth Platform Creation

Platform for regional expansion
Base for serving broader MENA markets
Hub for emerging market access
Integration into global operations

Types of Cross-Border Buyers

Strategic Corporates

Industry players expanding internationally
Often pay strategic premiums
Seek market access and synergies
Long-term strategic vision

International Private Equity

Global PE firms with regional interest
Often partner with local funds
Seek growth opportunities
Bring operational expertise

Regional Strategic Buyers

GCC companies acquiring internationally
Seeking diversification
Building regional platforms
Accessing new capabilities

Practical Considerations for Cross-Border Deals

Due Diligence Differences

International buyers often conduct more extensive due diligence:

Extended timeline expectations
More documentation requirements
Additional legal complexity
Currency and tax considerations

Cultural Considerations

Different negotiation styles
Varying decision-making processes
Communication expectations
Relationship building importance

Regulatory Requirements

Foreign ownership rules
Sector-specific restrictions
Free zone versus mainland considerations
Required approvals and timelines

Currency and Tax

Transaction currency considerations
Tax structuring requirements
Repatriation considerations
Transfer pricing implications

Preparing for International Buyers

Documentation Standards

International buyers expect institutional-quality documentation:

English-language materials
International accounting standards familiarity
Comprehensive data rooms
Professional presentations

Legal Preparation

Corporate structure clarity
Contract assignability
Change of control provisions
Intellectual property clarity

Financial Presentation

Clear financial reporting
Transparent revenue breakdown
Understandable cost structure
Normalized EBITDA

Management Readiness

English language capability
International meeting experience
Due diligence interview preparation
Post-acquisition retention planning

Working with International Advisors

Cross-border transactions benefit from advisors who:

Understand international buyer perspectives
Have cross-border transaction experience
Can bridge cultural differences
Manage process across time zones

Timeline Expectations

Cross-border deals typically require additional time:

Extended Process Elements:

International due diligence teams
Head office approvals
Regulatory clearances
Documentation coordination

Planning Recommendations:

Allow 20-30% additional timeline
Plan for multiple time zones
Anticipate additional documentation requests
Prepare for extended negotiations

Transaction Structure Considerations

International buyers may propose different structures:

Common Structure Elements:

Earnout provisions more common
Escrow requirements
Representation and warranty insurance
Post-closing adjustments

Currency Considerations:

Transaction currency selection
Exchange rate provisions
Payment mechanism clarity

Success Factors

Successful cross-border transactions share common elements:

Professional preparation: Investment-grade documentation and processes
Cultural awareness: Understanding of buyer expectations and norms
Realistic timelines: Allowing adequate time for complexity
Clear communication: Proactive information sharing
Expert support: Advisors with relevant experience

Considering a sale to international buyers? Contact our team to discuss how we can help position your business for cross-border success.

Related Reading: