8 December 2010

BDA Associate, Ahmed Al Balooshi, featured in Business In Gulf Magazine

December 8, 2010

Bahrain-based Business In Gulf magazine (B.I.G) interviewed Ahmed Al Balooshi, an employee of Business Development Asia “BDA”, on his pioneering secondment to Shanghai. Ahmed Al Balooshi explained to B.I.G how the relationship between the Gulf and China is ever-strengthening and how BDA is positioning itself to take full advantage of that.

“They say history repeats itself, and from what we’re experiencing that’s exactly what’s happening. The Old Silk is being revived but this time in a different form. The merchants on this New Silk Road are Arab investors looking for smart places to invest their petrodollars and expand their reach, while Asians seek to lock up energy supplies and find markets for their manufactured goods.

Gulf groups in the past have set up trading and sourcing companies in China to import their raw material and/or Chinese manufactured goods across the value chain for manufacturing facilities back home. Today, we are seeing that more and more Gulf groups are wanting to acquire Chinese or International companies with a strong presence in China knowing that China is not far from becoming the largest economy in the world. We are seeing this trend from both strategic and financial groups.

The difficulty though for these groups is to access the right type of M&A opportunities in the Chinese market for a number of reasons. The Middle East doesn’t have an abundance of regional advisors who have the capability to source mid-market opportunities in China. Another reason is due to the complexity of the Chinese market and the uncertainty issues that come from executing a transaction. Complex issues arising from Chinese deals are usually associated with the lack of strong on-the-ground presence of advisors in China.

Since 1996, BDA’s China-related deals have made up the biggest portion of its business. BDA operates in the mid-market space, which typically includes deal values between US$20-500m. Gulf Companies that are looking for opportunities in the lower mid-market range make up the majority of the Gulf’s Market. The Gulf of course has Sovereign Wealth Funds and Large Caps who are looking for deals US$500+, but this is not an area we focus on. We leave these to Bulge Bracket banks. Similarly Bulge Bracket banks don’t want to get involved in the deal sizes that we cover, since smaller mid-market transactions don’t bring in the fees they usually seek. To sum things up, this is why BDA thought it would be attractive for me to be co-based in China in order to bridge the gap between Gulf acquisition interests into China. There is no doubt that Gulf / China M&A will pick up once more and more Gulf groups feel confident about expanding into the Chinese market. And by placing me here for now, BDA wants to position itself to take full advantage of this.

As far as bankers go, I’m definitely the only Bahraini and maybe even Gulf mid-market M&A banker based in China.”

Ahmed Al Balooshi also mentioned how BDA is well positioned to advise Gulf groups for acquisitions in different Asian geographies that BDA covers the US, Western Europe, India, Korea, Japan, and SE Asia.

The article is published in the November 2010 edition of B.I.G magazine.

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