The Middle East and North Africa (MENA) region’s investment banking landscape recorded a notable surge in initial public offerings (IPOs) to an 18-year high and an 86 percent rise in bond issuance last year. However, the merger and acquisition landscape witnessed a decline in transactions.
In 2024, the MENA region witnessed a notable 126 percent surge in equity and equity-related issuance to $30 billion in 2024, marking the highest annual total in the region since 2019. The number of issues increased by 16 percent annually, with IPOs accounting for 41 percent of activity and follow-on issuance accounting for 59 percent.
In its latest investment banking report, LSEG revealed that the MENA region saw a total of 54 IPOs in 2024, six more than in 2023 and the highest annual total since 2007. They raised a combined $12.2 billion, a 12 percent increase from last year.
Largest IPOs and follow-on offerings in 2024
Food delivery firm Talabat raised $2 billion in its stock market debut in Dubai in November, the largest IPO in the MENA region during 2024. In second place came Oman’s OQ Exploration & Production IPO which raised $1.94 billion. Another notable MENA IPO in 2024 was Lulu Retail Holdings which raised $1.72 billion, while NMDC Energy raised $876.74 million.
Meanwhile, proceeds raised from follow-on offerings in the region reached a 16-year high of $17.9 billion, largely boosted by a $12.3 billion stock sale by Saudi Arabia’s Aramco in June. Last year, Saudi Arabia’s Savola Group also supported the surge in follow-on offerings with a $1.75 billion sale.
The energy and power sector was most active in the MENA IPO landscape with issuers raising a total of $16.1 billion, accounting for 54 percent of total equity capital raisings in the region during 2024. Retail followed with a 16 percent share. LSEG added that EFG Hermes took first place in the MENA ECM underwriting league table during 2024, with a 9.6 percent market share.
M&A transactions hit $75 billion
In the merger and acquisition sector, the MENA region recorded transactions worth $75 billion in 2024, down 4 percent annually and the lowest annual total since 2020, LSEG revealed. However, the number of deals announced in the region increased by 1 percent from 2023.
Deals involving a MENA target declined 8 percent to $30.3 billion during 2024 as domestic deals in the region declined 31 percent to a seven–year low of $16.1 billion. The largest M&A deal with MENA involvement during 2024 was ADNOC’s $17.6 billion takeover offer for German chemicals company Covestro.
Inbound deals, involving a non–MENA acquirer, increased 49 percent in value to a three–year high of $14.2 billion. On the other hand, outbound M&A activity declined 3 percent to $40.2 billion in 2024.
The industrial sector was the most active last year, accounting for 27 percent of MENA target M&A, followed by materials and the financial sector. The report also revealed that the UAE was the most targeted nation, followed by Saudi Arabia.
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Bond issuances surge to $119.6 billion
In debt capital markets, MENA bond issuance totaled $119.6 billion during 2024, 66 percent more than the value recorded in 2023 and an annual total only exceeded once before, in 2020. The number of issues increased by 86 percent over the same period.
Saudi Arabia was the most active issuer nation during 2024, accounting for 45 percent of total bond proceeds, followed by the UAE at 33 percent and Qatar at 10 percent.
Islamic bonds also saw a notable 44 percent annual surge in value to $46.2 billion, reaching an all-time annual record. Sukuk accounted for 39 percent of total bond proceeds raised in the region, compared to 45 percent last year at this time.
