The economic and political rationales of banking mergers and acquisitions in MENA after the Arab spring

Abstract

This thesis explores the motives and rationales behind the banking mergers and acquisitions made in Middle East North Africa (MENA) region by the state-owned Gulf banks after the Arab Spring. There are nine banking acquisition cases made in this period and all of them are subject of this study. Its aim is to figure out whether these acquisitions made for political reasons. To test, first the acquisition cases are examined in three levels in order to see if the investments make sense economically. These three levels study the bank-specific rationales, banking-specific rationales and country-specific rationales. If the acquisition decision cannot be explained in terms of economics, it might mean that there are political factors leading to cross-border banking investments. To find out, a state-level realist approach is utilized which links the investor country’s with the host country’s national interests. At this stage, the relationship between foreign direct investment and foreign policies is elaborated. This thesis is a contribution to the government’s usage of banks as political tool; yet its content is limited to MENA region and to the years between 2011 and 2015. It investigates nine banking acquisition cases and suggests that three of them hints political motives.