UAE and KSA Lead Investments Amid Cross-Border and Domestic Growth.
The MENA region witnessed strong growth in M&A deals in the first nine months of 2024, with 522 deals worth $71 billion, an increase of 9 percent compared to the same period last year, said the EY MENA M&A Insights. It went up by 7 percent more than that of the same period in 2023.
PC: InvestorDaily
UAE and KSA Dominate Regional Activity
The United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) appeared as the largest states for M&A activity, capturing 239 deals worth $24.5 billion combined. These two countries represented 52% of the whole region’s deal volume and 81% of its value. Sovereign wealth funds, including Abu Dhabi Investment Authority (ADIA) and Mubadala, played a significant role in driving this growth forward, in line with national economic objectives.
Cross-Border and Domestic Deals Flourishing
Cross-border M&As represented 52% of the deal volume and 73% of the deal value and, therefore, retain their preeminent position in the region’s M&A profile. The value of domestic M&A rose 44% year on year to $19.3 billion. The best-performing sectors were largely those in the oil and gas and metals and mining sectors; chemicals also performed well. Altogether, 248 deals constituted 48% of the overall transactions.
The US Remains an Investment Destination of Choice
The US remained a favourite investment destination for MENA investors, with 32 deals worth $18.3 billion. Through such organisations as the US-UAE Business Council, US businesses partnering with UAE stakeholders deepened bilateral investment ties.
High-value Deals and Key Sectors
The highest ten mergers and acquisitions took place in the GCC, with the largest deal recorded being February’s acquisition through Clayton Dubilier & Rice, Stone Point Capital, and Mubadala of Truist Insurance Holdings for $12.4 billion. Investments in insurance and oil and gas reached the highest volumes where 34% of the total deal value was registered.
Inbound and Outbound Investments Rise
Inbound deals into the MENA region increased by 20% in volume and 47% in value year-over-year, amounting to 127 deals worth $10.4 billion. The UAE dominated this category by accounting for 60% of the deal volume and 67% of the value. Outbound M&A activity contributed the most to the total deal value at 58%, with 147 deals aggregating to $41.4 billion. The US and China accounted for 70% of the outbound deal value.
By the end of the year, the Middle East and North Africa M&A market will close over 700 deals, near a five-year high of 750 deals,” noted Anil Menon, Head of M&A and Equity Capital Markets Leader for EY MENA. Despite geopolitical uncertainty and increasing cost of capital, policies of MENA business friendliness, diversification strategies, and increasingly faster digitalization continue to attract global and regional investors.
