The Middle East’s M&A scene looks back at a mixed first half of the year. According to analysis from EY, deal volume during this period was down by 14%, however, deal value saw a slight increase of 1% on the back of a flow of larger deals.
The latest M&A Insights report from EY (Ernst & Young) found that the MENA region witnessed a total of 318 merger and acquisition (M&A) deals amounting to $43.8 billion. The GCC region accounted for the majority of deals – 254, valued at $42.5 billion.
Brad Watson, Strategy & Transactions Leader of EY in MENA, said that the lower volume of dealmaking was due to a number of developments weighing heavily on M&A activity, such as rising interest rates, persistent inflation and economic uncertainty. “All in all, the M&A market in the first six months of the year was consistent with the trends observed in the second half of 2022.”
Sovereign wealth funds, such as Abu Dhabi Investment Authority and Mubadala from the United Arab Emirates, and the Public Investment Fund from the Kingdom of Saudi Arabia, continued to lead the deal activity in the region to support their countries’ economic strategies.
Ten of the region’s largest M&As were concentrated in the UAE and Saudi Arabia. In March 2023, US asset management firm Apollo Global Management and ADIA announced their plan to acquire UAE-based Univar Solutions for $8.2 billion.
In the same month, Blackstone along with ADIA signed a definitive agreement to acquire the UAE’s Cvent Holding for $4.7 billion. One month later, Savvy Games Group (owned by Public Investment Fund) announced its plan to acquire a 100% stake in the US mobile games developer Scopely, for $4.9 billion.
Financial sponsors played a key role in driving deal value. Transactions involving private equity or sovereign wealth funds constituted around 23% and 53% of the total deal volume and value respectively.
Tech sector leads
The technology sector contributed the most to the total deal value, with a value of $15 billion, followed by the chemicals sector, with a value of $11.9 billion, and the provider care sector, with a value of $3.3 billion.
“Investor interest focused mainly on cybersecurity, cloud computing, fintech and ecommerce, clearly indicating the segments that are poised to shape the future of the industry,” said Anil Menon, Head of M&A and Equity Capital Markets for MENA at EY.
Sourced from Consultancy-me