RIYADH: Mergers and acquisitions activity in the Middle East and North Africa region increased 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-based accountancy firm attributed the 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 stood out as significant bidders and targets in the regional M&A landscape.
The EY report found that Saudi Arabia’s sovereign wealth fund, along with the Abu Dhabi Investment Authority and the United Arab Emirates’ Mubadala, played a leading role in the region’s trading activities, supporting their respective countries’ economic strategies.
Brad Watson, EY MENA Strategy and Transactions Leader, noted a surge in cross-border M&A value, driven by companies seeking 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 during the first half of the year.
The analysis revealed that 10 of the MENA region’s highest-value M&A transactions at the start 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 shopping 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 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 transaction value.
“Saudi Arabia led both as a target and a bidder country, with the United Arab Emirates, Morocco, Bahrain and Egypt” featuring prominently in both categories, EY added.
Domestic deals in the MENA region increased 13 percent year-on-year to $4.6 billion. The first half of 2024 saw 94 transactions within and between the UAE and Saudi Arabia, representing 61 percent of the total domestic M&A deal volume.
Outbound activity was the largest contributor to total transaction value, with 96 transactions totaling $36.3 billion. Inbound transactions, on the other hand, totaled $6.4 billion across 70 transactions.
Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, commented: “M&A activity has benefited from key tailwinds, such as the low cost of capital. It is encouraging to see that 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 continued infrastructure spending by local governments.”
