RIYADH: Merger and acquisition activity in the Middle East and North Africa region saw a 1 percent year-on-year increase in the first half of 2024, reaching $49.2 billion across 321 deals, according to Ernst & Young.
The UK-based accounting firm attributed this steady growth mainly to activity in Saudi Arabia and the UAE, which together accounted for 152 deals worth $9.8 billion. Saudi Arabia and the UAE were notable for their significant roles as both bidders and targets in the regional M&A landscape.
EY's report highlighted that Saudi Arabia's sovereign wealth fund, Abu Dhabi Investment Authority and Mubadala from the UAE have played a leading role in deal activity in the region, supporting their respective countries' economic strategies.
Brad Watson, EY MENA strategy and transaction leader, said the growth in cross-border M&A value is driven by companies seeking to build synergies, expand market presence and gain global strategic advantages. He noted that the UAE, with its business-friendly regulations and efficient legislative framework, was particularly attractive to investors in the first half of the year.
The analysis showed that 10 of the highest valued M&A transactions in the MENA region by the beginning of 2024 were concentrated in the Gulf Cooperation Council countries. The largest deal was in February 2024, when Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investments acquired Trist Insurance Holdings for $12.4 billion.
In March 2024, Asian investment firms PAG, Mubadala, and ADIA invested $8.3 billion for a 60 percent stake in Chinese shopping mall company Zhuhai Wanda Commercial Management Group.
Watson also noted: “MENA countries continued to strengthen regional ties, increasing access to large and growing markets with Asian and European countries, as well as the US.”
Insurance and real estate emerged as the most attractive sectors for investors in the first half of 2024, contributing 47 percent of the total deal value.
“Saudi Arabia led the way as both a target and a bidder country, with the UAE, Morocco, Bahrain and Egypt” also featuring prominently in both categories, EY added.
Domestic transactions in the MENA region rose 13 percent year-on-year to $4.6 billion. The first half of 2024 saw 94 transactions within and between the UAE and Saudi Arabia, representing 61 percent of overall domestic M&A deal volume.
Outbound activity was the largest contributor to total deal value, with 96 deals worth $36.3 billion. In contrast, inbound deals totaled $6.4 billion in 70 transactions.
Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader commented, “M&A activity has benefited from significant tailwinds such as the low cost of capital. It is encouraging to see that regional M&A remains strong despite the high cost of capital. “
He attributed the resilience of regional M&A markets to “stable oil prices and ongoing infrastructure spending by local governments”.
