- The MENA region saw 522 M&A deals worth $71 billion in the first nine months of 2024, reflecting a 9% increase in volume and a 7% rise in value compared to 2023.
- UAE and KSA dominated M&A activity with 239 deals valued at $24.5 billion, representing 52% of total deal volume and 81% of total deal value.
- Cross-border M&As accounted for 52% of the total volume and 73% of the value, while domestic deals grew by 44% in value, driven by sectors like oil & gas and metals & mining.
- Outbound deals contributed 58% of total deal value, amounting to $41.4 billion, with insurance and real estate sectors driving 50% of this value through significant investments in the US and China.
The Middle East and North Africa (MENA) region experienced significant growth in mergers and acquisitions (M&A) during the first nine months of 2024. According to the EY MENA M&A Insights report, the region recorded 522 deals valued at $71 billion.
This marked a 9% increase in deal volume and a 7% rise in deal value compared to the same period in 2023. This growth highlights the region’s strategic importance and its appeal to both regional and international investors.
The Role of UAE and KSA in M&A Growth
The United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) emerged as the leading destinations for M&A activity in the region. Together, they accounted for 239 deals, collectively valued at $24.5 billion.
These two nations represented 52% of the total deal volume and 81% of the total value. Their investor-friendly policies and robust economic frameworks contributed to this dominance.
Sovereign wealth funds (SWFs) like the Abu Dhabi Investment Authority (ADIA), Mubadala, and Saudi Arabia’s Public Investment Fund (PIF) played a pivotal role in driving this growth, aligning their investments with national economic strategies.
Cross-Border M&As: A Major Contributor
Cross-border M&A activity significantly influenced the region’s performance, comprising 52% of the total deal volume and 73% of the deal value. These transactions demonstrated the increasing global interest in the MENA region as a lucrative market for investments.
Additionally, domestic M&A activity saw a notable rise, with deal value increasing by 44% year-on-year to reach $19.3 billion. Transactions involving government-related entities (GREs) in sectors such as oil and gas, metals and mining, and chemicals were key drivers of this growth. Domestic deals accounted for 48% of the total volume, reflecting a healthy balance between local and international engagements.
The US as a Preferred Target
MENA investors maintained a strong focus on the United States, with 32 deals valued at $18.3 billion. The US-UAE Business Council facilitated partnerships between prominent US companies and UAE stakeholders, fostering collaborations across various initiatives.
This dynamic highlights the strategic importance of the US for MENA investors and their efforts to leverage opportunities in one of the world’s largest economies.
Strategic Insights from EY
Brad Watson, EY MENA Strategy and Transactions Leader noted that the region’s M&A growth was driven by strategic policy reforms, liberalized investment regulations, and robust capital inflows. Companies actively pursued opportunities to expand and diversify their operations, resulting in a surge in cross-border deals.
The UAE remained a top choice for investors due to its business-friendly regulations and efficient legislative frameworks. Strengthening ties with Asian and European economies, along with established partnerships with the US, provided MENA countries access to larger and rapidly growing markets.
Concentration of High-Value Deals in the GCC
The Gulf Cooperation Council (GCC) dominated the list of the MENA region’s top 10 M&A transactions during the first nine months of 2024. The largest deal occurred in February when Clayton Dubilier & Rice, Stone Point Capital, and Mubadala Investment acquired Truist Insurance Holdings for $12.4 billion.
Another notable transaction was Saudi Aramco’s $8.9 billion acquisition of a 22.5% stake in Rabigh Refining and Petrochemical Company from Japan’s Sumitomo Chemical. Additionally, in March 2024, PAG, Mubadala, and ADIA invested $8.3 billion to acquire a 60% stake in the Chinese shopping mall operator Zhuhai Wanda Commercial Management Group.
Insurance and oil and gas emerged as the most attractive sectors for investors, collectively accounting for 34% of the total deal value. These sectors showcased strong potential, driven by strategic investments and robust demand.
Domestic Deals on the Rise
The region witnessed 248 domestic deals valued at $19.3 billion, reflecting a 7% increase in activity compared to the previous year. GCC countries played a major role, accounting for 81% of these deals. Intra-regional activity remained strong, with 139 deals taking place between the UAE and KSA, representing 56% of the total domestic deal volume.
Sectors such as technology and consumer products saw 78 deals, making up 31% of the domestic M&A volume. Meanwhile, oil and gas, along with metals and mining, led in terms of deal value, with 19 transactions amounting to $10.9 billion.
Oil and gas alone contributed 46% of the total deal value. This sector’s dominance underscores its critical role in the region’s economic landscape.
Key Target and Bidder Countries
KSA remained a leading target and bidder country, reflecting its robust investment environment. Other countries, including the UAE, Morocco, Bahrain, and Egypt, also featured prominently in both categories. This distribution highlights the diversity and depth of the MENA M&A landscape.
Inbound Investments Flourish
The MENA region’s attractiveness as a destination for foreign direct investment (FDI) was evident in the 127 inbound deals recorded during the first three quarters of 2024.
These deals, valued at $10.4 billion, marked a 20% increase in volume and a 47% rise in value compared to the same period in 2023. The United States and the United Kingdom accounted for 42% of the inbound M&A activity.
The technology sector, along with professional services, stood out as the most active in terms of inbound deal volume and value, contributing 48% and 39%, respectively. The US led this trend, accounting for 33% of the total deal volume in these sectors.
Notably, 80% of these deals involved partnerships with UAE entities, driven by rising digitalization and the adoption of artificial intelligence.
The UAE accounted for 60% of the total inbound deal volume and 67% of the value, underscoring its pivotal role in attracting foreign investments. This trend aligns with the UAE’s efforts to position itself as a global hub for innovation and technology.
Outbound Activity Shows Strong Momentum
Outbound M&A activity dominated the region’s deal value, contributing 58% of the total with 147 deals worth $41.4 billion. Insurance and real estate were the leading sectors, accounting for 50% of the outbound deal value. Notable investments by MENA-based SWFs played a significant role in driving this trend.
The United States and China collectively accounted for 70% of the outbound deal value, reflecting MENA investors’ focus on these key markets. Asia and North America together contributed 46% of the total outbound deal volume and 77% of the value.
Outlook for 2024
Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, emphasized the buoyancy of the MENA M&A market. He expressed confidence that the region would close the year with over 700 deals, nearing the five-year high of 750 transactions.
This achievement comes despite global geopolitical uncertainties and rising capital costs, highlighting the resilience and adaptability of MENA economies.
Key Takeaways
The first nine months of 2024 showcased the MENA region’s growing prominence in the global M&A landscape. Strategic investments, robust regulatory frameworks, and strong economic fundamentals contributed to this growth. The UAE and KSA remained at the forefront, driving both domestic and cross-border activity.
Meanwhile, increasing inbound and outbound investments underscored the region’s appeal as a dynamic and competitive market for global investors.
With a steady pipeline of deals and expanding partnerships, MENA is poised to sustain its momentum, positioning itself as a vital hub for mergers and acquisitions on the global stage.
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Last Updated on November 18, 2024 by Safiya K
