RIYADH: M&A activity in the Middle East and North Africa region saw a modest 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 audit 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 were known 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, along with the Abu Dhabi Investment Authority and Mubadala of the United Arab Emirates, played a leading role in the region's business operations and supported their respective countries' economic strategies.
Brad Watson, EY MENA strategy and transaction leader, observed an increase in cross-border M&A value, driven by companies looking to build synergies, expand market presence and gain global strategic advantage. He noted that the UAE, with its business-friendly regulations and effective regulatory framework, was particularly attractive to investors in the first half of the year.
The analysis revealed that 10 of the MENA region's highest-valued M&A transactions in early 2024 were concentrated in the Gulf Cooperation Council countries. The largest deal 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 percent stake in Chinese mall company Zhuhai Wanda Commercial Management Group.
Watson also noted: “MENA countries continued to strengthen regional relationships with Asian and European countries, as well as with the United States, 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 percent of total business value.
“Saudi Arabia led as both target and bidder country, with the United Arab Emirates, Morocco, Bahrain and Egypt” also prominent in both categories, EY added.
Domestic business in the MENA region increased by 13 percent year-on-year to reach $4.6 billion. The first half of 2024 saw 94 transactions within and between the UAE and Saudi Arabia, representing 61 percent of total domestic M&A deal volume.
Outbound activity was the largest contributor to total deal value, with 96 deals worth $36.3 billion. In contrast, incoming trades totaled $6.4 billion over 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 low capital costs. It is encouraging to see regional M&A remain robust despite the higher capital costs.”
He attributed the resilience of the regional M&A markets to “stable oil prices and ongoing infrastructure spending by local governments.”
