MENA's booming M&A market on the brink of $100 billion

24 February 2022 3 min. read
More news on

The Middle East and North Africa (MENA) market for mergers & acquisitions looks back at its best year on record, riding the global deals wave to hit total transaction value of just under $100 billion. This is according to new research from EY.

The study by the global accounting and consulting firm found that total deal value jumped by $14 billion from $85 billion in 2020 to $99 billion last year – a record M&A level for the region, said Brad Watson, MENA Strategy and Transactions Leader at EY.

“In 2021, we saw a tremendous surge in M&A activity as a result of improving post-Covid-19 market conditions. The recovery in oil and gas prices and an improving public health backdrop have also helped to lift the economic outlook in the region, leading to renewed confidence in regional boardrooms.”

Brad Watson, MENA Strategy and Transactions Leader, EY

The region’s performance builds on an equally bullish global deals environment. A Bain & Company report released earlier this year titled 2021 as the best year ever for dealmakers, with over $5 trillion in deal value closed. Meanwhile, a survey from EY’s colleagues in the US and UK found that there are no signs of slowdown, with over half of C-suite leaders expecting to accelerate their M&A agenda in 2022.

In the Middle East and North Africa region, more than 60% of deal value was closed by government-related entities including sovereign wealth funds and national oil companies. They contributed $63 billion to the total disclosed deal value of US$99 billion. 

M&A levels were primarily driven by domestic (intra-regional) deals (which increased from 192 deals in 2020 to 366 in 2021) and private equity backed deals (which increased from 73 deals in 2020 to 165 deals in 2021).

By geography, the UAE experienced the highest deal activity in terms of volume (303 deals) whilst Saudi Arabia attracted the most M&A capital ($47.4 billion). Egypt also saw robust deal activity in 2021 with 118 deals worth $7.7 billion.

The oil and gas sector witnessed the highest deal activity in terms of deal values, largely driven by a stake sale by Saudi Aramco in its natural gas pipeline business. In April 2021, a consortium led by EIG Global Energy Partners acquired a 49% stake in Aramco Oil Pipelines Company from Aramco for $12.4 billion.

This was followed by a $12 billion deal in September after a consortium of buyers – including Air Products and Chemicals, ACWA Power Barka, Air Products Qudra and the Saudi Aramco Power Company – signed an agreement to acquire ASUs, gasification, syngas clean-up, utilities and power assets from Aramco.

As the year ended, BlackRock and Hassana Investment signed a lease and leaseback deal with Saudi Aramco in December 2021. The deal will see the acquisition of its gas pipeline network for $15.5 billion.

Outlook for 2022

Looking ahead into 2022, Anil Menon, Head of MENA M&A at EY, said: “We expect continued confidence and momentum in 2022. Key deal themes include continued investments by government-related entities, digitisation and technology, and portfolio optimisation.”

Note: the outlook for 2022 was given prior to Russia’s attack on Ukraine this morning.