RIYADH: M&A activity in the Middle East and North Africa region increased by a modest 1 percent year-on-year in the first half of 2024 to reach $49.2 billion across 321 deals, according to Ernst & Young .
The British accounting firm attributes this steady growth primarily to activity in Saudi Arabia and the UAE, which together accounted for 152 deals worth $9.8 billion. Saudi Arabia and the UAE have been known for their prominent roles as both bidders and targets in the regional M&A landscape.
The EY report highlights that Saudi Arabia's sovereign wealth fund, along with the Abu Dhabi Investment Authority and the UAE's Mubadala, are playing a leading role in deals in the region, supporting their countries' economic strategies.
Brad Watson, head of strategy and transactions at EY MENA, has seen a surge in the value of cross-border mergers and acquisitions, driven by companies looking to create synergies, expand market presence and gain global strategic advantage. He noted that the UAE, with its business-friendly regulation and effective legal framework, was particularly attractive to investors in the first half of the year.
The analysis revealed that the 10 M&A deals in the MENA region with the highest value 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 percent stake in Chinese shopping center company Zhuhai Wanda Commercial Management Group.
Watson also noted, “MENA countries continued to strengthen regional relationships with Asian and European countries, as well as the US, expanding access to larger and growing markets.”
Insurance and real estate became the most attractive sectors for investors in the first half of 2024, accounting for 47 percent of the total value of transactions.
“Saudi Arabia leads the way as both a target country and an applicant country, with the UAE, Morocco, Bahrain and Egypt” also featuring prominently in both categories, EY added.
Domestic transactions in the MENA region grew 13 percent year-on-year to $4.6 billion. In the first half of 2024, there were 94 transactions in and between the UAE and Saudi Arabia, representing 61 percent of total 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 transactions.
Anil Menon, EY's Head of M&A and Equity Capital Markets, M&A, commented: “M&A activity has benefited from significant headwinds such as the low cost of capital. Encouragingly, regional M&A remains strong despite the higher cost of capital.”
He attributed the resilience of regional M&A markets to “stable oil prices and sustained local government spending on infrastructure.”
