UAE and Saudi Arabia Dominate 2024 MENA M&A Market with $71 Billion in Deals

The MENA region saw a notable increase in mergers and acquisitions (M&A) during the first nine months of 2024, with 522 deals worth a total of $71 billion. According to the EY MENA M&A Insights 9 M 2024 report, this reflects a 9% growth in deal volume and a 7% rise in value compared to the previous year.

The UAE and Saudi Arabia led M&A activities in the region, collectively accounting for 239 deals valued at $24.5 billion. These figures represent 52% of the total deal volume and an impressive 81% of the MENA region’s M&A value. The strong performance of these two nations is attributed to their supportive business policies, advanced infrastructure, and expanding investment ecosystems, which continue to attract significant regional and global investment.

Sovereign wealth funds (SWFs), including the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company, and the Public Investment Fund (PIF), played significant roles in driving M&A activity, aligning with the countries' economic diversification agendas.

Cross-border deals have been particularly influential, representing 52% of the overall M&A volume and 73% of the total value. This trend shows MENA investors pursuing strategic acquisitions outside their borders, aligning with the broader liberalization of regional investment policies. Domestic transactions also increased, with 248 deals totaling $19.3 billion, a 7% rise in volume, especially prominent in the GCC's key sectors such as oil, gas, metals, and mining.

The largest deal during this period was the $12.4 billion acquisition of Truist Insurance Holdings, involving Clayton Dubilier & Rice, Stone Point Capital, and Mubadala. Other significant transactions included Saudi Aramco’s $8.9 billion purchase of a stake in Rabigh Refining and Petrochemical Company and the $8.3 billion investment by a consortium comprising PAG, Mubadala, and ADIA in China’s Zhuhai Wanda Commercial Management Group.

Sectors like insurance, oil and gas, and technology attracted the most investment, with insurance and oil & gas alone comprising 34% of the total deal value. Technology also saw increased activity due to the growing trend of digital transformation, with substantial deals in consumer tech and AI.

Inbound foreign direct investment (FDI) in MENA surged by 20% in volume and 47% in value year-on-year, with the US and the UK being the leading sources. The UAE remained a top hub, contributing 60% of inbound deal volume and 67% of value, thanks to its favorable business environment and focus on digital innovation.

Outbound M&A activity was robust, with MENA accounting for 58% of total deal value through 147 deals worth $41.4 billion. Asia and North America were the primary targets, driven by investments in insurance and real estate sectors, with a significant push from regional SWFs.

Despite global uncertainties, EY MENA projects continued strength in M&A activities, expecting over 700 deals by year-end, close to the recent five-year peak of 750. Factors supporting this outlook include economic diversification, policy reforms, and sustained investment by SWFs. EY leaders highlighted that strategic policy changes, an open investment environment, and strong capital inflows have contributed to the increase in M&A activity, positioning the UAE as a preferred investment destination.

News Source: Gulf Business