According to the latest data, the MENA region recorded 359 mergers and acquisitions (M&A) deals worth $42.6 billion in the first half of 2022. EY MENA M&A Insight report.
M&A activity increased by 12 year-on-year (YoY), driven by continued post-pandemic economic growth across the region driven by higher oil prices and increased confidence in corporate boards % increase.
Domestic deals contributed 48% and 33%, respectively, of the total volume and value of M&A deals over the six months, according to the report.
Oil price volatility, economic uncertainty and global market turmoil provided some momentum, while trading activity was largely driven by the involvement of private equity (PE) or sovereign wealth funds (SWF).
M&A activity involving PEs and SWFs accounted for 35% and 38% of total deal volume and value, respectively, in the first half of 2022.
Among domestic PE or SWF deals, the UAE was the most popular destination for 18 deals and Saudi Arabia was the most active acquisition region for 27 deals.
The report also found that deals involving government-related entities (GREs) totaled $16.9 billion in deal value in the first half of 2022, accounting for 40% of the disclosed deal value.
Interestingly, GRE-led deals have declined from an average of 62% in the previous year to 40%, indicating an increase in private sector participation in regional deals.
Brad Watson, Strategy and Transactions Leader at EY MENA, said: In the United Arab Emirates and Saudi Arabia in particular, fiscal reforms aimed at enhancing cooperation between the public and private sectors have increased investor appetite, and a full-scale government-led initiative is expected in the region. supporting a rapidly growing ecosystem of start-ups in the United States, driving more deals. activity. “
Top 5 MENA Eligible Countries by Transaction Value
The United Arab Emirates leads the top five target countries across the MENA region, with 105 contracts worth $14.2 billion signed. This was followed by Egypt with 65 deals worth US$3.2 billion, Saudi Arabia with 39 deals worth US$2.8 billion, Morocco with 18 deals worth US$1.8 billion and Oman with 10 deals totaling US$700 million. transaction has been completed.
Top 5 Covered Subsectors in MENA Region by Deal Value
Amid commodity price volatility and inflationary pressures, the GCC region continued to diversify away from the oil and gas business. As a result, industries such as transportation, consumer goods, telecommunications, real estate, power and utilities continued to attract the majority of investment.
Anil Menon, Head of MENA M&A and ECM at EY, said: The private sector is leading the trade in MENA, reflecting attractive fundamentals, ample liquidity and a revaluation of long-duration growth companies. ”
Overall, 173 domestic deals were completed in the first six months of 2022, worth $13.9 billion.
Ghitha Holding has agreed to buy Tamween Management for $2.4 billion. Q Holdings acquired Reem Investments for his $1.6 billion. Saudi Arabia’s Public Investment Fund bought Kingdom Holding Company (16.8% stake) for his $1.5 billion.
The top five domestic subsectors by transaction value are real estate ($3.3 billion), consumer goods ($2.9 billion), banking and capital markets ($2.4 billion), wealth management ($1.5 billion), and other transportation ($0.8 billion). dollars) was
Rising energy prices, the implementation of business-friendly reforms in the region and the easing of government travel restrictions have boosted inbound trade volumes in the MENA region, with 94 Equivalent to $9.8 billion. Year.
The United Arab Emirates remained a popular investment destination with 51 deals worth $7.4 billion in the first half of 2022. This is underpinned by reforms aimed at strengthening the business environment, attracting foreign investment, and encouraging companies to set up or expand their operations.
Egypt has also emerged as a major investment destination, with a 3-fold surge in trading activity in the six months of 2022. This is largely driven by lucrative government initiatives such as granting special licenses to foreign investors.
US leads inbound trade activity in MENA region
US-based companies are the most active investors in MENA in terms of deal volume, participating in 30% of inbound deal activity with a particular focus on technology-related investments. Activities mainly consisted of Caisse de Depot et Placement du Quebec in June taking 22% stake in Jebel Ali Free Zone, 22% stake in National Industries Park and Jebel Ali Port.
The top five subsectors by transaction value are Other Transportation ($5.0 billion), Power & Utilities ($1.7 billion), Technology ($1.5 billion), Chemicals ($600 million) and Real Estate ($400 million). did.
In the first six months of 2022, the region will see 92 outbound transactions, an increase of 19 billion, compared to 6 million in 2021, with 75 transactions reaching $5.2 billion. reached the dollar. The UAE saw the most outbound transactions, driven by technology and consumers. Out of 54 outbound transactions from the United Arab Emirates, it contributed 35% in terms of transaction volume.
The United Arab Emirates also witnessed the largest outbound deal signed in May. Emirates Telecommunications Group Company has acquired his 9.8% stake in UK’s Vodafone Group in a deal worth $4.398 billion.
The top five outbound target subsectors by transaction value are telecommunications ($4.4 billion), media and entertainment ($3.5 billion), airlines ($2.2 billion), consumer goods ($1.3 billion), and power and utilities ($1.3 billion).
https://gulfbusiness.com/mena-region-records-359-ma-deals-signed-worth-42-6bn-in-h1-2022-ey-report/ 359 M&A deals valued at $42.6 billion were signed in the MENA region in the first half of 2022