The Middle East and North Africa (MENA) region witnessed an increase in merger and acquisition (M&A) activity during the first six months of 2024 with a total of 321 deals amounting to $49.2 billion. When compared to the first half of 2023, deal volume this year grew by 1 percent while deal value saw a 12 percent rise.
UAE, Saudi Arabia lead activity
The latest EY MENA M&A Insights H1 2024 report reveals that the UAE and Saudi Arabia were the preferred destinations for investors with 152 deals reaching a total value of $9.8 billion. Sovereign wealth funds including the Abu Dhabi Investment Authority (ADIA) and Mubadala from the UAE and the Public Investment Fund (PIF) from Saudi Arabia continued to lead M&A deal activity in the MENA region to support their countries’ economic strategies.
Cross-border M&As
During the first six months of 2024, cross-border M&As in the MENA region played a significant role in growth, contributing to 52 percent of the overall volume and 87 percent of the value. This marks a 15 percent year-on-year growth in value. Meanwhile, domestic M&A activity accounted for 48 percent of the total number of deals.
“We saw a surge in cross-border M&A value as companies made investments to further build synergies, expand market presence, and gain strategic advantages on a global scale,” stated Brad Watson, EY MENA Strategy and Transactions Leader. Watson added that the UAE was a favored investment destination due to its business-friendly regulations and efficient legislative framework.
“Meanwhile, MENA countries continued to strengthen regional relationships with Asian and European countries, alongside existing ties with the U.S., enabling them to gain access to larger and growing markets,” he added.
The U.S. remained the preferred target destination for MENA outbound investors with 19 deals amounting to $16.6 billion.
Top 10 M&As in the GCC region
The first half of 2024 saw 155 domestic MENA deals with a total value of $6.4 billion, marking a 13 percent increase in M&A activity. GCC players accounted for 85 percent of the deals, reflecting a high level of intra-regional M&A activity. The UAE and Saudi Arabia reported 94 deals, accounting for 61 percent of the overall domestic M&A deal volume.
“M&A, in the recent past, has been the beneficiary of significant tailwinds such as low cost of capital. The resilience of the regional M&A markets is underpinned by stable oil prices and continued infrastructure spending by local governments,” stated Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader.
Read: Saudi Arabia’s foreign assets rise 5.5 percent to $467.5 billion in June 2024
Real estate sector emerges as main contributor
The real estate (including hospitality and leisure) sector emerged as the main contributor to deal value with 15 deals amounting to $1.3 billion. This rise comes amidst the surge in the region’s tourism, upcoming mega projects, and a growing middle-class income. Meanwhile, the consumer products and technology sectors witnessed 47 deals in the domestic market, representing 30 percent of the total volume.
The first half of 2024 saw 70 inbound deals with a total value of $6.4 billion. However, outbound activity was the largest contributor to total deal value with 96 deals that amounted to $36.3 billion, marking a 19 percent increase in value compared to H1 2023.
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