UAE and Saudi Arabia Lead MENA Region in M&A Activity with $9.8 Billion in Deals

Maryam Pervez -

The UAE and Saudi Arabia have cemented their positions as premier investment destinations in the MENA region, attracting substantial interest in mergers and acquisitions (M&A). According to the EY MENA M&A Insights H1 2024 report, the two nations recorded 152 M&A deals with a combined disclosed value of $9.8 billion in the first half of 2024.

The UAE led the region with the largest transaction, the $12.4 billion acquisition of Truist Insurance Holdings by Clayton Dubilier & Rice, Stone Point Capital, and Mubadala Investment. Both UAE and Saudi Arabia also topped the list of MENA bidder countries in terms of deal volume and value, reflecting their significant role in the region's M&A landscape.

Growth in M&A Activity

MENA's overall M&A activity saw a slight uptick, with 321 deals totaling $49.2 billion, a 1% increase in deal volume, and a 12% rise in deal value compared to H1 2023. Sovereign wealth funds (SWFs) such as the Abu Dhabi Investment Authority (ADIA), Mubadala, and Saudi Arabia’s Public Investment Fund (PIF) were pivotal in driving this growth, aligning with their respective countries’ economic strategies.

Brad Watson, EY MENA Strategy and Transactions Leader, highlighted the promising start to 2024 despite oil price fluctuations.

"The first half of the year found the UAE to be a favored investment destination due to its business-friendly regulations and efficient legislative framework,"

Watson said.

Cross-Border and Domestic M&A Activity

Cross-border M&A played a significant role, contributing 52% of the overall deal volume and 87% of the value, marking a 15% year-on-year growth. The US remained the preferred target for MENA outbound investors with 19 deals worth $16.6 billion. Meanwhile, domestic M&A activity accounted for 48% of the total number of deals, with GCC players involved in 85% of the deals.

Insurance and real estate emerged as the most attractive sectors, accounting for 47% of the total deal value. The first half of 2024 saw significant investments in these sectors, driven by increasing tourism, upcoming mega projects, and a growing middle-class income.

Key Transactions

Notable transactions included the acquisition of a 60% stake in Zhuhai Wanda Commercial Management Group by PAG, Mubadala, and ADIA for $8.3 billion, and the purchase of a 67% stake in Greek company Terna Energy by Abu Dhabi Future Energy Company (Masdar) for $2.9 billion.

Resilience of the MENA M&A Market

Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, noted the resilience of the regional M&A markets despite the higher cost of capital.

"The resilience of the regional M&A markets is underpinned by stable oil prices and continued infrastructure spending by local governments,"

Menon said.

The UAE and Saudi Arabia's strategic economic policies and robust regulatory frameworks continue to make them attractive destinations for M&A activity. With ongoing investments and a favorable business environment, the MENA region is poised for sustained growth in the M&A landscape.

News Source: Khaleej Times