MENA M&A activity saw 321 deals valued at US$49.2b in H1 2024

According to the EY MENA M&A Insights H1 2024 report, the MENA region witnessed a slight increase in merger and acquisition (M&A) activity with a total of 321 deals amounting to US$49.2b. When compared to H1 2023, deal volume this year grew by 1%, while deal value saw a rise of 12%.

The United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) were the preferred destinations for investors with 152 deals reaching a total disclosed value of US$9.8b. They were also among the top MENA bidder countries in terms of deal volume and value, indicating their active participation in the region’s M&A landscape. 

Sovereign wealth funds (SWFs), such as Abu Dhabi Investment Authority (ADIA) and Mubadala from the UAE and the Public Investment Fund (PIF) from KSA, continued to lead the deal activity in the region to support their countries’ economic strategies.

Brad Watson, EY MENA Strategy and Transactions Leader, says:

“Dealmaking got off to a promising start in 2024 despite oil price fluctuations. We saw a surge in cross-border M&A value as companies made investments to further build synergies, expand market presence, and gain strategic advantages on a global scale. In particular, the first half of the year found the UAE to be a favored investment destination due to its business-friendly regulations and efficient legislative framework. Meanwhile, MENA countries continued to strengthen regional relationships with Asian and European countries, alongside existing ties with the US, enabling them to gain access to larger and growing markets.”

During the first six months of 2024, cross-border M&As played a significant role, contributing to 52% of the overall volume and 87% of the value, marking a 15% y-o-y growth in value. Meanwhile, domestic M&A activity accounted for 48% of the total number of deals. 

The United States of America (US) remained the preferred target destination for MENA outbound investors with 19 deals amounting to US$16.6b. With the US-UAE Business Council playing an active role in promoting partnerships, prominent US companies are collaborating with UAE public and private sector stakeholders on various initiatives.

Top 10 M&As concentrated in the GCC region

Ten of the MENA region’s highest-valued M&As in the first six months of 2024 were concentrated in the GCC region. The largest transaction took place in February 2024, when Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment announced their acquisition of Truist Insurance Holdings for US$12.4b. In March 2024, PAG, Mubadala and ADIA invested US$8.3b in a 60% stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group. In June 2024, Abu Dhabi Future Energy Company (Masdar) agreed to acquire a 67% stake in the Greek company TERNA ENERGY for US$2.9b.

Insurance and real estate were the most attractive sectors for investors in the first six months of the year, accounting for 47% of the total deal value. KSA led in the lists of target countries as well as bidder countries, with the UAE, Morocco, Bahrain and Egypt featured in both rankings as well. 

Domestic deals grow in number

The first half of 2024 saw 155 domestic deals with a combined disclosed value of US$6.4b, marking a 13% increase in M&A activity. GCC players were involved in 85% of the deals, reflecting a high level of intra-regional M&A activity. There were 94 deals within and between the UAE and KSA, accounting for 61% of the overall domestic M&A deal volume.

The real estate (including hospitality and leisure) sector became the main contributor to deal value with 15 deals amounting to US$1.3b, driven by increasing tourism, upcoming mega projects and a growing middle-class income. The consumer products and technology sectors witnessed 47 deals in the domestic market, representing 30% of the total volume. 

North America and Europe lead in inbound deals 

The first six months of 2024 recorded 70 inbound deals with a total disclosed value of US$‌​​6.4​‌b. Europe led in terms of deal volume with 80%, and North America made the highest contribution to deal value at 98%. 

The professional firms and services sector reported the highest volume and value with 17 inbound deals worth US$‌​​‌2.0​‌b, 15 of which were completed in the UAE. The technology sector followed with 16 deals worth US$1.7b, with US-UAE partnerships contributing 38% of the deal volume and 96% of the disclosed deal value. Increasing artificial intelligence-related investments in the UAE are expected to enhance these relationships. 

Outbound deals witness lively activity

During H1 2024, outbound activity was the largest contributor to total deal value with 96 deals that amounted to US$36.3b, marking a 19% increase in value when compared to H1 2023. Insurance and real estate accounted for 57% of the deal value in this space, mainly resulting from two deals involving MENA-based SWFs. The US and China contributed 75% of the total outbound deal value.

Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, says:

“M&A, in the recent past, has been the beneficiary of significant tail winds such as low cost of capital. It is heartening to see regional M&A activity remain robust despite the higher cost of capital. The resilience of the regional M&A markets is underpinned by stable oil price and continued infrastructure spending by local governments."