Despite higher capital costs, M&A activity in the MENA region remained strong in the first half of 2024.
The region saw 321 deals totalling $49.2B, reflecting a 1% increase in deal volume and a 12% rise in deal value compared to H1 2023, according to Ernst & Young’s MENA M&A Insights H1 2024 report.
The UAE and Saudi Arabia accounted for nearly half of these deals, with 152 transactions totalling $9.8B, making them prime destinations for investors.
Both countries ranked highly among MENA bidders in deal volume and value, with sovereign wealth funds such as Abu Dhabi Investment Authority (ADIA) and Mubadala from the UAE, and the Public Investment Fund (PIF) from KSA, driving deal activities to support economic strategies.
Saudi Arabia led in both target and bidder country lists, with the UAE, Morocco, Bahrain, and Egypt also featuring prominently.
There were 94 deals within and between the UAE and KSA, making up 61% of the overall domestic M&A volume.
The GCC region saw all 10 of the highest-valued M&As in MENA, with the largest being the $12.4B acquisition of Truist Insurance Holdings by Clayton Dubilier & Rice, Stone Point Capital, and Mubadala in February.
Other top M&As included PAG, Mubadala, and ADIA acquiring a 60% stake in Zhuhai Wanda Commercial Management Group for $8.3B, and Abu Dhabi Future Energy Company (Masdar) purchasing a 67% stake in Terna Energy for $2.9B in June.
Cross-border M&As accounted for 52% of the volume and 87% of the value, marking a 15% year-on-year growth in value, while domestic M&As made up 48% of total deals.
Brad Watson, EY MENA Strategy and Transactions Leader, noted the promising start to 2024 despite oil price fluctuations, with a surge in cross-border M&A value driven by investments to build synergies and expand market presence globally.
The US remained the preferred target for MENA outbound investors, with 19 deals worth $16.6B.
Insurance and real estate were the most attractive sectors, comprising 47% of total deal value. The real estate sector, driven by increasing tourism, mega projects, and a growing middle-class income, contributed $1.3B from 15 deals. Consumer products and technology sectors saw 47 deals domestically, representing 30% of the total volume.
