RIYADH: Mergers and acquisitions activity in the Middle East and North Africa region saw a 1 percent year-on-year increase in the first half of 2024, reaching $49.2 billion in 321 deals, says Ernst & Young.
The UK accounting firm attributed this steady growth to activity in Saudi Arabia and the UAE, which accounted for 152 contracts worth $9.8 billion. Saudi Arabia and the United Arab Emirates have stood out for their significant roles as bidders and targets in the regional M&A world.
The EY report highlighted that Saudi Arabia's sovereign wealth fund, along with Abu Dhabi Investment Authority and Mubadala from the United Arab Emirates, played a key role in deal activity in the region, supporting the economic strategy of each country.
Brad Watson, EY MENA Strategy and Transaction Leader, has observed an increase in the value of cross-border M&A, driven by companies looking to build partnerships, expand market presence and gain strategic global advantage. He noted that the United Arab Emirates, with its business regulations and effective legal framework, was particularly attractive to investors during the first half of the year.
The analysis revealed that 10 of the most important 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 companies PAG, Mubadala, and ADIA invested $8.3 billion in a 60 percent stake in the Chinese company Zhuhai Wanda Commercial Management Group.
Watson also noted, “MENA countries have continued to strengthen regional ties with Asian and European countries, as well as with the United States, improving access to large 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 the contract value.
“Saudi Arabia led the way as a target and importing country, with the UAE, Morocco, Bahrain, and Egypt” also prominent in both categories, EY added.
Domestic contracts in the MENA region grew by 13 percent year-on-year, reaching $4.6 billion. The first half of 2024 saw 94 transactions within and between the UAE and Saudi Arabia, representing 61 percent of total domestic M&A deals.
Outdoor activities were the largest contributor to total contract value, with 96 contracts worth $36.3 billion. In contrast, incoming deals totaled $6.4 billion in 70 transactions.
Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, commented: “M&A activity has benefited from significant tailwinds such as the cost of capital. It is encouraging to see regional M&A remain strong despite the cost of capital.”
He attributed the sustainability of the regional M&A market to “oil prices and ongoing infrastructure spending by local governments.”
