C. Advantages and Disadvantages of Acquiring Public Companies When a manager evaluates the profitability of acquiring a public company, it is crucial to identify the advantages and disadvantages. By doing so, the company will be able to make effective and strategic decisions, especially when entering a business in the volatile MENA region. Several determining factors can serve as incentives for managers, including the fact that the acquisition could be considered a strategic decision. which supplies local brands, increases distribution channels, thereby leading to higher levels of efficiency. Despite these claims, Ayoubi claims that privatization in the MENA region is not linked to the management efficiency of state-owned enterprises, as no studies confirm this claim. It is claimed that public enterprises discourage competition while private ownership promotes competition and further contributes to producing more results (Ayoubi, 1997). Furthermore, the acquisition of a state-owned enterprise can be favorable as it promotes market knowledge and improves the government's business relations in the economy. On the other hand, the privatization of state-owned enterprises is strongly influenced by the government, which can not only maximize its financial revenues, but also pursue broader social goals (e.g. Wortman 1990, Estrin 1994). The apparent Wasta problem in the MENA region is another important aspect that needs to be considered, especially when acquiring a state-owned company. For example, in the case of Egypt, in partially privatized companies, Al-Fuloul (remnants of the Mubarak regime) holds significant equity stakes, necessary to maintain its bargaining power. One of the disadvantages of acquiring a public company is the lengthy negotiation process and high costs. Rigid restrictions such as stipulated employment guarantees, investment commitments, partial local ownership...... middle of paper ...... -hi>.6. El-Haddad, A. 2010. “Effects of the global crisis on the Egyptian textile and clothing sector.” International Labor Organization and Egyptian Center for Economic Studies (accessed December 12, 2013), .7. Fattouh, B. 2013. Privatization in the Middle East and North Africa. Course notes. (Accessed December 21, 2013),7. US Department of State. 2013. “Investment Climate Report 2013.” United States Department of State, (accessed December 12, 2013), .8. World Bank. 1995. “Bureaucrats in Business.” The World Bank report 1995, (accessed December 21 2013), .