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RIYADH: Saudi Arabia and the UAE helped drive merger and acquisition activities in 2024 up 7 percent across the Middle East and North Africa to reach $92.3 billion, according to an analysis.
In its latest report, professional services network firm EY revealed that the MENA region witnessed 701 deals over the period, a 3 percent rise from the 679 deals seen in 2023.
EY added that the UAE and Saudi Arabia together reported 318 deals in 2024 valued at $29.6 billion. These two nations were also among the top MENA bidders indicating their active participation in the merger and acquisition landscape.
According to the analysis, this expansion was driven mainly by reforms in capital markets across the region, as well as strategic policy changes and strengthened efforts to attract international investments.
Earlier this month, banking firm Morgan Stanley also echoed similar views and said that the MENA region will witness a significant “structural upswing” in transaction volume and value size in 2025 propelled by policy shifts and regulatory reforms.
Commenting on the latest report, strategy and transactions leader at EY MENA Brad Watson said: “In 2024, the MENA region witnessed positive developments in the M&A space with a year on year increase in activity as well as overall deal value. With companies actively seeking opportunities to grow and diversify their operations, cross-border deals were the major driver in terms of volume and value.”
EY said that the Gulf Cooperation Council region accounted for the majority of deals within the MENA region at 580, accounting for 52 percent of the volume and 74 percent of the value.
The report added that the UAE reported the largest M&A deal in 2024, with the acquisition of Truist Insurance by Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment for $12.4 billion.
The second-biggest deal was made by Saudi Aramco, with the energy giant acquiring a 22.5 percent stake in Rabigh Refining and Petrochemical Co. from Tokyo-based Sumitomo Chemical for $8.9 billion.
The third-largest deal was the acquisition of a 60 percent stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group by PAG, Mubadala and Abu Dhabi Investment Authority for $8.3 billion.
EY revealed that outbound deals contributed to the largest share of M&A transaction value in 2024, accounting for 61 percent of the total consolidated deal value, with 199 transactions amounting to $56.6 billion.
In terms of sectors, technology and consumer products were the leading contributors to overall deal volume, each experiencing a 10 percent year-on-year increase.
The US was the largest acquiring country outside of the region by volume and value, with 48 transactions totaling $4.6billion.
“The top five subsectors in the M&A landscape were insurance, asset management, real estate and hospitality, power and utilities, and technology — indicating a real interest in the innovative solutions that the MENA region can provide,” said Watson.
He added: “In addition, there is a focus on strengthening regional relationships with Asian and European countries, enabling MENA countries to gain access to larger and growing markets.”
According to the report, domestic M&As contributed to 48 percent of the total deal volume in 2024, with 339 deals valued at $24.4 billion.
The technology and consumer products sectors together contributed 35 percent of the deal volume, driven by accelerated digital transformation in the region.
“In 2024, technology remained the most attractive sector for investors, accounting for 23 percent of total inbound and domestic deal volume. We’re living through a productivity renaissance fueled by technology and AI, which will manifest in capital allocation and M&A,” said Anil Menon, head of M&A and equity capital markets leaders at EY MENA.
The oil and gas sector topped the sectors in domestic M&A values at $9 billion, largely due to Saudi Aramco’s $8.9 billion acquisition of a stake in Rabigh Refining and Petrochemical Co.