MENA’s M&A Deals Increased by 3% in 2024

The MENA region has recorded a 3% rise in merger and acquisition (M&A) activity with 701 deals in 2024, compared to 679 deals in 2023, according to the latest EY MENA M&A Insights 2024 report.

The total deal value in 2024 reached $92.3 billion, indicating a 7% increase from the previous year, and the GCC region accounted for the majority of deals with 580, amounting to $90 billion, EY, which provides consulting, assurance, tax and transaction services, said.

This expansion was largely fuelled by substantial reforms in the capital markets, strategic policy changes and enhanced efforts to attract foreign investments. Cross-border deals were the major driver of M&A deals in the MENA region, accounting for 52% of the volume and 74% of the value, the report said.

Brad Watson, EY MENA Strategy and Transactions Leader, said that the region witnessed positive developments in the M&A space with a y-o-y 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.

“The top five sub-sectors 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. In addition, there is a focus on strengthening regional relationships with Asian and European countries, enabled MENA countries to gain access to larger and growing markets,” he noted.

Sovereign wealth funds (SWFs), such as the Abu Dhabi Investment Authority (ADIA) and Mubadala from the UAE, as well as the Public Investment Fund (PIF) from Saudi Arabia, continued to lead the deal activity in the region.

The UAE reported the region’s largest M&A deal of the year with the announced acquisition of Truist Insurance by Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment for $12.4 billion. This was followed by Aramco’s acquisition of a 22.5% stake in Rabigh Refining and Petrochemical Company from Tokyo-based Sumitomo Chemical for $8.9 billion.

The third-largest deal was the acquisition of a 60% stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group by PAG, Mubadala and ADIA for $8.3 billion.

Outbound Deals

Outbound deals contributed the largest share of M&A transaction value accounting for 61% of the total consolidated deal value, with 199 transactions amounting to $56.6 billion.

The region continues to be one of the most attractive destinations for foreign direct investors as there were 163 inbound deals with a combined value of $11.4 billion, marking an 18% increase in volume and a 42% surge in value compared with 2023.

The US emerged as the largest acquiring country outside of the region by volume and value, with 48 transactions totalling $4.6 billion.

Saudi Arabia and UAE Top Destinations                                                           

The UAE remained the preferred destination for investors due to its enabling business environment. The country achieved the highest volume and value for inbound transactions, with 96 deals valued at $7.6 billion, representing 67% of the total deal value.

The highest number of deals were 35 in the technology sector, driven by the country’s focus on AI, cybersecurity and digital transformation. The landmark acquisition of Abu Dhabi’s Group 42 by Microsoft for $1.5 billion reflected the strengthening ties between the UAE and the US.

The UAE and Saudi Arabia reported significant combined deal volume with 318 deals valued at $29.6 billion and the two countries were also among the top MENA bidders, indicating their active participation in the M&A landscape, the report said.

MENA Investors’ target destination was the US with 41 deals that amounted to $19.9 billion in total value.

Domestic Deal Activity

The domestic M&As contributed 48% of the total deal volume in 2024 with 339 deals, compared with 333 deals in 2023. The combined disclosed value of domestic M&A transactions stood at $24.4 billion.

The technology and consumer products industries have been drawing increased investor interest, and both sectors together contributed 35% of the total domestic deal volume.

Continuing last year’s upward trajectory, oil and gas was the top sector by disclosed deal value in 2024 with $9 billion, accounting for 37% of the total domestic deal value. This was largely due to Saudi Aramco’s acquisition of Rabigh Refining and Petrochemical Company.