Middle East sovereign wealth funds were responsible for injecting over $81.7 billion into mergers and acquisitions (M&As) in 2023, accounting for 86 percent of the total transaction value for the year. This is according to a recent report from Bain & Company.
The region witnessed an estimated $95 billion in mergers and acquisitions in 2023, representing a 3 percent annual decline compared to the $98 billion recorded in 2022. This decline occurred in the backdrop of a global decrease in mergers and acquisitions, which reached a 10-year low of $3.3 trillion, reflecting a 15 percent drop.
Several factors contributed to this decrease, including higher interest rates, economic and geopolitical challenges, and increased government scrutiny of monopoly regulations. Regulatory bodies have audited over $360 billion worth of deals in the past two years.
The report underscores the influential role of government funds in shaping investment activities in the region. Elif Koc, partner at Bain and Company Middle East, noted that the Middle East is undergoing a significant energy transformation, with a growing emphasis on clean energy investments to achieve zero carbon emissions.
Furthermore, the report highlights the interest of sovereign wealth funds in investing in Asian companies, aiming to revitalize the manufacturing sector and foster innovation within the Middle East. In fact, sovereign wealth fund deals with Asia surged by 60 percent to $8.5 billion during the first nine months of 2023.
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