UAE And Saudi Arabia Lead MENA M&A Activity To Over $92bn In 2024

The MENA region recorded a 3 per cent rise in merger and acquisition (M&A) activity with 701 deals in 2024, compared to 679 deals in 2023.

The total deal value in 2024 reached $92.3bn, indicating a 7 per cent increase from the previous year. The GCC region accounted for the majority of deals with 580, amounting to $‌90​‌bn.

UAE and Saudi M&A activity

This expansion was largely fuelled by substantial reforms in the capital markets, strategic policy changes and enhanced efforts to attract foreign investments.

Cross-border deals were the major driver of M&A deals in the MENA region, accounting for 52 per cent of the volume and 74 per cent of the value.

Brad Watson, EY MENA Strategy and Transactions Leader, said: “In 2024, the MENA region witnessed positive developments in the M&A space with a y-o-y increase in activity as well as overall deal value.

“With companies actively seeking opportunities to grow and diversify their operations, cross-border deals were the major driver in terms of volume and value.

“The top five subsectors were insurance, asset management, real estate and hospitality, power and utilities, and technology – indicating a real interest in the innovative solutions that the MENA region can provide.

“In addition, there is a focus on strengthening regional relationships with Asian and European countries, enabled MENA countries to gain access to larger and growing markets.”

Sovereign wealth funds (SWFs), such as the Abu Dhabi Investment Authority (ADIA) and Mubadala from the UAE, as well as the Public Investment Fund (PIF) from Saudi Arabia (KSA), continued to lead the deal activity in the region.

The UAE reported the region’s largest M&A deal of the year with the announced acquisition of Truist Insurance by Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment for $12.4bn.

This was followed by Saudi Aramco’s acquisition of a 22.5 per cent stake in Rabigh Refining and Petrochemical Company from Tokyo-based Sumitomo Chemical for $8.9bn.

The third-largest deal was the acquisition of a 60 per cent stake in the Chinese shopping mall company Zhuhai Wanda Commercial Management Group by PAG, Mubadala and ADIA for $8.3bn.

Outbound deals contributed the largest share of M&A transaction value in 2024 accounting for 61 per cent of the total consolidated deal value, with 199 transactions amounting to $‌​​56.6​‌bn.

The MENA region continues to be one of the most attractive destinations for foreign direct investors.

In 2024, there were 163 inbound deals with a combined value of $‌​​11.4​‌bn, marking an 18 per cent increase in volume and a 42 per cent surge in value compared to 2023.

In terms of sectors, technology and consumer products were the leading contributors to overall deal volume, each experiencing a 10 per cent year-on-year (y-o-y) increase.

The United States emerged as the largest acquiring country outside of the region by volume and value, with 48 transactions totalling $‌​​‌4.6​‌bn.

The UAE remained the preferred destination for investors due to its enabling business environment.

The country achieved the highest volume and value for inbound transactions, with 96 deals valued at $‌​​‌7.6bn, representing 67 per cent of the total deal value.

The highest number of deals, 35, were in the technology sector, driven by the country’s focus on AI, cybersecurity and digital transformation.

The landmark acquisition of Abu Dhabi’s Group 42 by Microsoft for $1.5bn reflects the strengthening ties between the UAE and the United States.

The US-UAE Business Council actively promotes partnerships between the two countries, creating favourable conditions for cross-border innovation.

Saudi Arabia was another popular investment destination in the region. The UAE and KSA reported significant combined deal volume with 318 deals valued at $29.6bn.

The two countries were also among the top MENA bidders, indicating their active participation in the M&A landscape.

In 2024, the United States was the favourite target destination for MENA investors with 41 deals that amounted to $19.9bn in total value.

Morocco made it among the region’s top five target countries as well as bidder countries by volume and value last year, while Qatar, Bahrain, Egypt and Kuwait also made appearances between the target and bidder lists.

Domestic M&As contributed 48 per cent of the total deal volume in 2024 with 339 deals, compared to 333 deals in 2023.

The combined disclosed value of domestic M&A transactions stood at $‌​​24.4​‌bn.

The technology and consumer products industries have been drawing increased investor interest, fuelled by digital transformation and evolving consumer behaviours in the region.

Both sectors together contributed 35 per cent of the total domestic deal volume.

Continuing last year’s upward trajectory, oil and gas was the top sector by disclosed deal value in 2024 with $9bn, accounting for 37 per cent of the total domestic deal value.

This was largely due to Saudi Aramco’s $8.9bn acquisition of Rabigh Refining and Petrochemical Company.

Anil Menon, EY MENA Head of M&A and Equity Capital Markets Leader, said: “In 2024, technology remained the most attractive sector for investors, accounting for 23 per cent of total inbound and domestic deal volume.

“We’re living through a productivity renaissance fuelled by technology and AI, which will manifest in capital allocation and M&A.

“The deal book (across sectors) for the fiscal year 2025 remains extremely strong and we expect to see continued portfolio momentum and interest in MENA-based assets.”