RIYADH: M&A activity in the Middle East and North Africa region increased slightly by 1 percent year-on-year in the first half of 2024, reaching USD 49.2 billion across 321 deals, according to Ernst & Young.
The UK-based accounting firm attributed this continued growth to activity in Saudi Arabia and the United Arab Emirates, which together saw 152 deals worth $9.8 billion. Saudi Arabia and the UAE have a reputation for playing key roles as both bidders and targets in the region’s 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 executing regional deals, supporting their respective economic strategies.
Brad Watson, EY MENA Strategy and Transactions Leader, noted a surge in cross-border M&A value driven by companies looking to create 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 reveals that the top 10 largest M&A transactions in the MENA region in early 2024 were concentrated in the Gulf Cooperation Council states. 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 2014, Asian investment firms PAG, Mubadala and ADIA invested US$8.3 billion for a 60% stake in Chinese department store giant Zhuhai Wanda Commercial Management Group.
“Countries in the Middle East and North Africa region continue to strengthen their regional relationships with Asian and European countries, as well as with the United States, to increase access to larger and growing markets,” Watson added.
Insurance and real estate emerged as the most attractive industries for investors in the first half of 2024, accounting for 47 percent of total deal value.
“Saudi Arabia is the top target and bidder, with the United Arab Emirates, Morocco, Bahrain and Egypt also in the two key categories,” EY added.
Domestic deals in the MENA region increased by 13 percent year-on-year to $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 the total domestic M&A deal volume.
Outbound activity contributed the most to total deal value, with 96 deals totaling $36.3 billion. In contrast, inbound deals totaled $6.4 billion across 70 transactions.
“M&A activity has benefited from key drivers such as low funding costs. It is encouraging to see that M&A in the region remains strong despite higher funding costs,” said Anil Menon, EY MENA’s Head of M&A and Equity Capital Markets Leader.
He attributed the resilience of the region’s M&A market to “stable oil prices and continued infrastructure spending by local governments.”
