RIYADH: Mergers and acquisitions activity in the Middle East and North Africa increased slightly by 1 percent in the first half of 2024 compared to the same period last year, reaching $49.2 billion across 321 deals, according to Ernst & Young.
The UK-based accounting firm attributed this steady growth mainly to its activities in Saudi Arabia and the United Arab Emirates, which together completed 152 transactions valued at $9.8 billion. Saudi Arabia and the United Arab Emirates played a significant role in the regional M&A landscape, both as bidders and targets.
The EY 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 transaction activity in the region and supported the economic strategies of their respective countries.
Brad Watson, EY MENA Strategy and Transactions Leader, observed a rise in cross-border M&A value driven by companies looking to build synergies, expand their market presence and gain global strategic advantages. He noted that the UAE, with its business-friendly regulations and efficient legal framework, was particularly attractive to investors in the first half of the year.
The analysis found that 10 of the highest value M&A transactions in the MENA region in early 2024 were concentrated in the Gulf Cooperation Council countries. The largest deal took place 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 firms 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 have continued to strengthen their regional relationships with Asian and European countries, as well as the United States, improving access to larger and growing markets.”
The most attractive sectors for investors in the first half of 2024 were insurance and real estate, accounting for 47 percent of the total transaction value.
“Saudi Arabia was both a target and bidding country, with the United Arab Emirates, Morocco, Bahrain and Egypt” also playing a prominent role in both categories, EY added.
Domestic transactions in the MENA region increased by 13 percent year-on-year, reaching $4.6 billion. In the first half of 2024, there were 94 transactions within and between the UAE and Saudi Arabia, accounting for 61 percent of total domestic M&A transaction volume.
The largest contributor to the total value of transactions was outbound activity, with 96 transactions totaling $36.3 billion. In contrast, inbound transactions totaled $6.4 billion, with 70 transactions.
Anil Menon, Head of M&A and Equity Capital Markets at EY MENA, commented: “M&A activity has benefited from significant tailwinds such as low cost of capital. It is encouraging to see that regional M&A activity remains robust despite the higher cost of capital.”
He attributed the resilience of regional M&A markets to “stable oil prices and ongoing infrastructure spending by local governments.”
