Professor Khawar Qureshi QC, Head of McNair Chambers
Post-pandemic, mergers and acquisitions (M&A) transactions are expected to pick up speed in the region including Qatar, as businesses focus more on efficiency and cost optimisation amid growing competition in the markets. While Qatar’s banking sector has already witnessed a couple of merger agreements, there is also greater room for M&A activity in the country’s retail and hospitality sectors, an expert in international and commercial law has said.
The $2 trillion core GCC banking sector is expected to have fewer, yet bigger and better banks which will be more international, more digital, and more customer-focused in the next five years, or sooner, studies have said.
In Qatar, Barwa Bank and ibq have completed their legal merger in 2019, and now forms the rebranded Dukhan Bank. While most recently, Masraf Al Rayan and Al Khaliji have announced that they have entered into a merger agreement to create one of the region’s leading Shari’ah-compliant regional banks.
In an interview with The Peninsula, Head of McNair Chambers and one of the UK’s leading commercial and international law Queen’s Counsel, Professor Khawar Qureshi QC, said M&A is an inevitable consequence of competition in the market.
“In the aftermath of the COVID-19 pandemic, many businesses will be focusing on restructuring to try and ensure that they can operate in the ‘new normal’ as efficiently as possible. The banking sector has been the subject of considerable consolidation in places such as in Europe and the USA post the 2008 financial crisis".
"The banking sector in Qatar is in some ways different from that in other jurisdictions. The nature of business that is undertaken in Qatar seems to be more well grounded in most cases. Nevertheless, it is an inevitable consequence of competition in the market, that there will have to be fewer, stronger players. That is likely to be the case not just in banking, but more broadly,” he added.
Qureshi, who practices from his offices in Doha and London, has over 30 years of legal experience; and has been involved in more than a thousand cases all over the world, for or against more than 70 States and their entities including several GCC States. He has also acted for or against a number of multi-national corporations on complex multi-billion dollar disputes in Africa, South America, and South Asia.
Asked on which other business sectors in Qatar may also benefit more from M&A activity, he said: “Economies of scale, achieving greater efficiency can all assist in providing for sustainable growth. There may be greater room for M&A activity in sectors such as retail and hospitality in Qatar”.
Qureshi also reiterated the importance of balance and diversity. “This is a challenge that is faced in all economies, where the outcome of merger and acquisition is large players, and some suggestion that a few large players create an uneven, uncompetitive market. Much will depend upon how the regulatory authorities in Qatar view the importance of competition. This is becoming an increasingly significant question in the USA and Europe,” he added.
According to Qureshi, businesses always need to identify where they can pitch in as competitive as possible. He reiterated that Qatar has many advantages from a logistics perspective, including its globally central location, first class airline with extensive reach, and the country’s much expanded port facilities.
He added that reconnecting with the GCC completely will also further boost the country’s exports market. “The COVID-19 pandemic has shown us that states must work together. There is greater strength when states work together. The Al-Ula declaration will hopefully be supported by confidence building measures, so that the events of the past three and a half years can be put into the past. I have witnessed remarkable dynamism in Qatar over the past 12 years since we opened McNair Chambers, not least in the face of some severe pressures. I was optimistic when we opened the office here in 2008, and I am even more optimistic now that, God willing, Qatar has a very bright future, not just within the GCC, but more broadly,” added Qureshi.
