Just one month into the year, five banks are merging: a three-way merger in oil-rich Abu Dhabi and a cross-country combination in Kuwait and Bahrain. More deals are in the works.
Bloomberg News reports that as oil prices settle at a new normal that’s barely enough to balance the budget of Gulf Arab monarchies, governments are engineering ways to stay competitive, prompting an unprecedented consolidation wave. Abu Dhabi, home to 6% of global oil reserves, combined three of its investment firms to create a wealth fund with about $250 billion of assets, shortly after another mega-merger between two of its largest lenders.
It’s not only banks that are combining. Saudi Aramco is in talks to acquire Saudi Basic Industries Corp., in what would be Saudi Arabia’s largest-ever M&A deal. Insurers, airlines and other petrochemical firms are said to be exploring potential tie-ups.
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