Middle East Sees Surge In 2024 M&A Activity As Sovereign Wealth Funds Lead Investments

It comes as the global 2024 M&A market is ending the year much as it began — with anticipation for a break in the buyer-seller logjam.

The year has been marked by careful adaption as dealmakers accommodate the new realities of higher interest rates and intense regulatory scrutiny.

Middle East M&A activity

Bain & Company predicts overall deal value will reach $3.5tn by the end of 2024, up 15 per cent year over year and consistent with mid-2010s levels.

Global M&A deal volume is up 7 per cent year over year, reversing a two-year decline.

The Middle East has played a key contribution in this global growth. Sovereign wealth funds and government-related entities in Saudi Arabia and the UAE have led this robust performance, which aligns with broader global trends.

Grégory Garnier, Middle East Head of Bain’s Private Equity and Sovereign Wealth Fund practices, said: “The Middle East’s exceptional M&A growth underscores the region’s transformation into a global investment powerhouse.

“Sovereign wealth funds and leading regional players are not only driving domestic opportunities but also capitalising on international markets with strategic precision.

“The surge in high-value deals within energy, technology, and advanced manufacturing reflects a broader shift toward innovation and sustainability, positioning the Middle East as a key driver of global economic activity.”

While globally, private equity deal value rose by 29 per cent and venture capital increased by 30 per cent YoY, the Middle East saw extraordinary sector-specific growth.

Energy and Natural Resources, Technology, and Advanced Manufacturing Services reported YoY increases of approximately 140 per cent, 90 per cent, and 300 per cent, respectively.

As challenges and litigation extended deal close timelines in 2024, nearly half (47 per cent) of dealmakers said regulatory concerns impacted the types of deals their companies considered.

This dynamic was mirrored in the Middle East, where global investors increasingly prioritised the region due to its comparatively favourable regulatory environment.

Investments in European targets by Middle Eastern acquirers have grown by over 100 per cent YTD compared to 2023, highlighting their strategic realignment toward regions offering better value and stability.

The largest deals globally and regionally showcased a clear focus on synergies. Scale deals accounted for 59 per cent of total deal value in 2024 globally, the highest proportion since 2015, and were also dominant in the Middle East, reflecting the region’s emphasis on consolidating leadership in energy and advanced manufacturing.

In response to persistently high interest rates, strategic acquirers globally have been more selective in their deals, requiring more concrete value creation.

Middle Eastern dealmakers exemplified this adaptability, leveraging both revenue and cost synergies in high-value transactions. The region’s strategic focus and disciplined approach continue to attract global capital.

Early adopters of generative AI reported significant efficiencies in 2024. Globally, one in five M&A practitioners has used the technology for sourcing, screening, and diligence.

The Middle East has been quick to adopt these tools as well, with dealmakers leveraging AI to streamline processes in a fast-growing and competitive market.