RIYADH: M&A activity in the Middle East and North Africa region grew modestly by 1% year-on-year in the first half of 2024, reaching $49.2 billion across 321 deals, according to Ernst & Young.
The UK accounting firm attributed this steady growth mainly to activity in Saudi Arabia and the United Arab Emirates, which together accounted for 152 deals valued at $9.8 billion. Saudi Arabia and the United Arab Emirates have stood out for their significant roles as both bidders and targets in the regional M&A landscape.
The EY report highlighted that Saudi Arabia's sovereign wealth fund, along with the Abu Dhabi Investment Authority and the UAE's Mubadala, played a leading role in the region's trading activity, supporting the respective countries' economic strategies.
Brad Watson, EY MENA Strategy and Transactions Leader, has seen an increase in the value of cross-border mergers and acquisitions, driven by companies looking to create 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 value M&A deals in the MENA region at the beginning of 2024 were concentrated in the Gulf Cooperation Council countries. The largest transaction occurred in February 2024, when Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment acquired Truist Insurance Holdings for $12.4 billion.
In March 2024, Asian investment firm PAG, Mubadala and ADIA invested $8.3 billion in a 60% stake in Chinese mall company Zhuhai Wanda Commercial Management Group.
Watson also noted, “MENA countries have continued to strengthen regional relationships with Asian and European countries, as well as the US, improving access to larger and growing markets.”
Insurance and real estate emerged as the most attractive sectors for investors in the first half of 2024, accounting for 47% of total transaction value.
“Saudi Arabia led as both a target and a bidder, with the UAE, Morocco, Bahrain and Egypt” also featuring prominently in both categories, EY added.
Domestic deals in the MENA region grew 13% year-on-year to $4.6 billion. The first half of 2024 saw 94 transactions in and between the UAE and Saudi Arabia, representing 61% of the total volume of domestic M&A transactions.
Outbound activity was the largest contributor to total deal value, with 96 deals worth $36.3 billion. In contrast, inbound trades totaled $6.4 billion in 70 trades.
Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, commented: “M&A activity has benefited from significant headwinds such as the low cost of capital. It is encouraging to see that regional M&A remains robust despite the higher cost of capital.”
He attributed the resilience of regional M&A markets to “stable oil prices and continued infrastructure spending by local governments.”
