RIYADH: M&A activity in the Middle East and North Africa region saw a modest 1 percent year-on-year increase in the first half of 2024 to reach $49.2 billion across 321 deals, according to Ernst & Young.
The UK-based accountancy firm attributes this steady growth mainly to activity in Saudi Arabia and the United Arab Emirates, which together accounted for 152 deals worth $9.8 billion. Saudi Arabia and the United Arab Emirates have been notable for their prominent roles as both bidders and targets in the regional M&A landscape.
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 trade activity in the region and supported the economic strategies of their respective countries.
Brad Watson, EY MENA head of strategy and transactions, has seen a surge in the value of cross-border M&A, driven by companies seeking to build synergies, expand market presence and gain global strategic advantages. He noted that the UAE, with its business-friendly regulations and effective legislative framework, was particularly attractive to investors in the first half of the year.
The analysis revealed that 10 of the most valuable M&A transactions in the MENA region at the beginning of 2024 were concentrated in the countries of the Gulf Cooperation Council. 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 2024, Asian investment firm PAG, Mubadala and ADIA invested $8.3 billion in a 60 percent stake in Chinese trading 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, 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 business value.
“Saudi Arabia led the way as both a target and a candidate country with the United Arab Emirates, Morocco, Bahrain and Egypt,” added EY.
Domestic trade in the MENA region increased by 13 percent year-on-year to $4.6 billion. The first half of 2024 saw 94 intra-UAE and inter-Saudi transactions, accounting for 61 percent of total domestic M&A transaction volume.
Outbound activity was the largest contributor to total deal value, with 96 deals totaling $36.3 billion. In contrast, inbound transactions totaled $6.4 billion across 70 transactions.
Anil Menon, head of M&A and head of equity capital markets at EY MENA, said: “M&A activity has benefited from significant spin-offs such as low cost of capital. It is encouraging to see that regional M&A remains robust 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.”
