Saudi Arabia, UAE propel regional M&A activity in H1 to hit $49.2bn

Merger and acquisition activity in the Middle East and North Africa region saw a modest 1 percent increase year on year in the first half of 2024, reaching $49.2 billion across 321 deals, according to Ernst & Young.

The UK-based accounting firm attributed this steady growth primarily to activity in Saudi Arabia and the UAE, which together accounted for 152 deals valued at $9.8 billion. Saudi Arabia and the UAE were notable for their significant roles as both bidders and targets in the regional M&A landscape.

EY’s report highlighted that Saudi Arabia’s sovereign wealth fund, alongside Abu Dhabi Investment Authority and Mubadala from the UAE, played a leading role in the region’s deal activity, supporting their respective countries’ economic strategies.

Brad Watson, EY MENA Strategy and Transactions Leader, observed a surge in cross-border M&A value, driven by companies seeking to build synergies, expand market presence, and gain global strategic advantages. He noted that the UAE, with its business-friendly regulations and efficient legislative framework, was particularly attractive to investors during the first half of the year.

The analysis revealed that 10 of the MENA region’s highest-valued M&A transactions in early 2024 were concentrated in the Gulf Cooperation Council countries. The largest deal occurred in February 2024, when Clayton Dubilier & Rice, Stone Point Capital, and Mubadala Investment acquired Truist Insurance Holdings for $12.4 billion.

In March 2024, Asian investment firm PAG, Mubadala, and ADIA invested $8.3 billion in a 60 percent stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group.

Watson also noted: “MENA countries continued to strengthen regional relationships with Asian and European countries, as well as with the US, enhancing access to larger and growing markets.”

Insurance and real estate emerged as the most attractive sectors for investors in the first half of 2024, accounting for 47 percent of the total deal value.

“Saudi Arabia led as both a target and bidder country, with the UAE, Morocco, Bahrain, and Egypt” also featured prominently in both categories, EY added.

Domestic deals in the MENA region increased by 13 percent year-on-year, reaching $4.6 billion. The first half of 2024 saw 94 transactions within and between the UAE and Saudi Arabia, representing 61 percent of the overall domestic M&A deal volume.

Outbound activity was the largest contributor to total deal value, with 96 deals amounting to $36.3 billion. In contrast, inbound deals totaled $6.4 billion across 70 transactions.

Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, commented, “M&A activity has benefited from significant tailwinds such as low cost of capital. It is encouraging to see regional M&A remain robust despite the higher cost of capital.”

He attributed the resilience of the regional M&A markets to “stable oil prices and ongoing infrastructure spending by local governments.”