BrazilMENA’s mergers & acquisitions market set to eclipse 700 deals this year
The number of mergers & acquisitions closed this year in the Middle East and North Africa is set to eclipse the 700 mark, a notable increase on last year’s dealmaking activity, according to analysis by EY.
In the first nine months of 2024, the MENA region witnessed an increase in merger and acquisition (M&A) activity with a total of 522 deals amounting to $71 billion. When compared to the same period in 2023, deal volume this year grew by 9%, while deal value saw a 7% rise.
Based on the trend, “we expect to end the year with more than 700 deals, which will be very close to the historic five-year high of 750 deals,” said Anil Menon, Head of M&A and Equity Capital Markets for MENA at EY. “This performance is remarkable in the context of uncertain geopolitics and higher cost of capital.”
Indeed, around the world, ailing economies, uncertain geopolitics and high interest rates have put a brake on the rebound of M&A activity back to the glory levels of 2021 and 2022. Previous research had already hinted at the MENA region being a “rare sweet swot” during the more sluggish 2023 and 2024, yet EY’s latest research now confirming that the MENA landscape will close the year on its previously anticipated high.
“The MENA M&A market is extremely buoyant,” said Menon, highlighting the UAE and KSA markets as the main drivers. The two nations recorded 239 deals during this period, totaling $24.5 billion and representing 52% of the total deal volume and 81% of the deal value in the MENA region.
The largest deal in 2024 was the acquisition of Truist Insurance Holdings by Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment for $12.4 billion. At a national level, the largest financial transaction took place in Saudi Arabia: Saudi Aramco’s $8.9 billion acquisition of a stake in Rabigh Refining and Petrochemical Company.
As a result of these two megadeals, the insurance and oil & gas sectors were (up until the end of September) the most attractive sectors for buyers and sellers in 2024, representing 34% of total deal value.
Cross-border M&A
Cross-border M&A’s played a significant role in the nine-month period, contributing 52% of the overall volume and 73% of the value. In terms of inbound deals, the MENA region attracted a 20% increase in volume, with the US and UK leading the charge. In terms of outbound investments, the US remained the preferred target destination for MENA companies and investors with 32 deals amounting to around $18 billion.
Key drivers
Commenting on the report, Brad Watson, MENA Strategy & Transactions Leader at EY, said: “Deal activity in the MENA region has seen a notable improvement this year, driven by strategic policy shifts, the liberalization of investment regulations and robust capital inflows from investors. With companies actively seeking opportunities to grow and diversify their operations, we have observed a surge in cross-border M&A volume and value.”
“In particular, the UAE remained a favored investment destination during the first nine months of 2024 due to its business-friendly regulations and efficient legislative framework. Meanwhile, strengthening regional relationships with Asian and European economies, alongside existing ties with the US, enabled MENA countries to gain access to larger and growing markets.”
EY’s M&A offering
According to data from Mergermarket, EY is the number 1 M&A financial advisor in the Middle East, a position it has held for consecutive years. The firm’s end-to-end deals offerings are provided by the Strategy & Transactions business, with the strategy and commercial due diligence expertise led by subsidiary EY-Parthenon.
Additionally, EY was named among the leading M&A consultancies in Consultancy.org’s latest industry assessment for the Middle East.
