The Role of Corporate Leverage in Shaping Mergers and Acquisitions Strategies: A Cross- National Study of the United Arab Emirates

Abstract

The author investigates the role of corporate leverage in the formulation of an organization’s M&A strategy in the UAE context. M&A being increasingly important in the UAE's dynamic business environment, the study attempts to disentangle the influence of corporate leverage on the choice of acquisition targets and payment methods, as well as the strategic orientation of M&A deals. Using a cross-national comparative approach, it considers both financial and strategic parameters in corporate decision-making. Results infer that corporate leverage has an effect on the acquirer's risk appetite, wherein companies highly leveraged tend to engage in cash transactions and the purchase of strategic targets with low financial risk. This study enhances the understanding of how corporate leverage influences M&A activities in emerging economies and will serve as a guide for business executives and policymakers in the UAE. The paper thus acts as a reference point for further research into governance and strategic investment decision-making in M&A.