RIYADH: Merger and acquisition activity in the Middle East and North Africa region in the first half of 2024 increased 1 percent year-on-year to $49.2 billion across 321 deals, according to Ernst & Young.
The UK-based accounting firm attributed the steady growth primarily to activity in Saudi Arabia and the UAE, which accounted for a total of 152 deals worth $9.8 billion. Saudi Arabia and the United Arab Emirates were notable for their significant roles as bidders and targets in the region's M&A landscape.
The EY report emphasized that Saudi Arabia's State Investment Fund, along with the Abu Dhabi Investment Authority and Mubadala of the United Arab Emirates, play a leading role in regional transaction activity and support the economic strategies of the respective countries.
Brad Watson, EY MENA strategy and transaction leader, observed the rise in value of cross-border M&A, driven by companies seeking to create synergies, expand market presence and gain global strategic advantages. He noted that the UAE was particularly attractive to investors in the first half of the year with its favorable business laws and efficient legal framework.
The analysis revealed that 10 of the most valuable M&A deals in the Middle East and North Africa region in early 2024 were concentrated in the countries of the Persian Gulf Cooperation Council. The biggest deal happened in February 2024, when Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment bought 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 mall company Zhuhai Wanda Commercial Management Group.
Watson also noted that MENA countries continued to strengthen regional ties with Asian and European countries, as well as with the United States, increasing 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% of total transaction value.
EY added: “Saudi Arabia led the way as a target and bidder country, with the United Arab Emirates, Morocco, Bahrain and Egypt also prominent in both categories.
Domestic trade in the MENA region increased by 13 percent year-on-year to $4.6 billion. The first half of 2024 saw 94 deals within and between the UAE and Saudi Arabia, accounting for 61% of total domestic M&A deal volume.
Outbound activities accounted for the largest share of total deal value with 96 deals worth $36.3 billion. In contrast, incoming trades amounted to $6.4 billion in 70 transactions.
Anil Menon, Head of M&A and Capital Markets Leader, EY MENA, commented: “M&A activity has benefited from significant headwinds such as the low cost of capital. “It's encouraging to see regional M&A persist despite higher capital costs.”
He attributed the resilience of regional M&A markets to “stable oil prices and continued infrastructure spending by local governments.”
