Mena M&A activity in 2023 remains resilient

The Middle East and North Africa (Mena) region witnessed a steady M&A market with total deal value for 2023 reaching $86.0 billion, indicating a 4 per cent increase on previous year, a report showed on Monday.

According to the EY Mena M&A Insights 12M 2023 update, the GCC region accounted for the majority of deals at 565, valued at $83.2 billion.

M&A activity in 2023 remained buoyant as dealmakers shrugged geopolitical tensions, rising cost of capital and general economic uncertainty in western markets. Domestic deals dominated the region in terms of volume at 49 per cent, while cross-border M&As contributed to 72 per cent of overall value. With companies seeking to gain strategic advantages on a global scale, cross-border deal value rose by 14 per cent year on year (y-o-y).

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

The UAE reported the region’s largest M&A of the year with the announced acquisition of Univar Solutions by Apollo Global Management and ADIA for $8.2 billion. This was followed by the acquisition of the US mobile games developer Scopely, Inc. by PIF-owned Savvy Games Group for $4.9b, and the acquisition of the UAE’s Cvent Holding by Blackstone and ADIA for $4.7 billion closing the top three.

Outbound deals contributed the largest share of the M&A deal value in 2023. A total of 208 deals amounted to $53.5 billion. In terms of sectors, technology accounted for most of the volume with 141 deals, while chemicals ranked first in deal value with $17 billion.

North America remained the largest acquiring region by value with transactions worth a total of $2.7 billion and the highest number of inbound Mena deals with 32.

Brad Watson, EY Mena strategy and transactions leader, says: “Dealmaking remained strong in 2023. SWFs led M&A activity in Mena with focus on national development and investing in sectors of the future. We expect M&A activity in Mena to remain robust in 2024 given continuing secular trends around energy transition and digitalization of everything.”

The UAE and Saudi Arabia among favourite investment destinations

The UAE consolidated its status as the preferred destination for investors due to its business-friendly regulations and efficient legal framework. In 2023, the US was the favorite target destination for the UAE investors with 21 deals that amounted to $15.3b in total value. The US-UAE Business Council actively promotes partnerships between the two countries.

Anil Menon, EY Mena head of m&a and equity capital markets leader, said: “The Mena M&A market demonstrated remarkable resilience in spite of regional political tensions and global economic uncertainty. Confidence in regional board rooms remains high, as Saudi Arabia and the UAE embark on the greatest renaissance any region has undertaken.”