The Middle East and North Africa saw more than $55bn of M&A activity in the first nine months of the year. according to the latest EY MENA M&A Insights report.
It was a reduction of 23 per cent on the same period in 2021 as global market conditions, rising inflation and lesser demand see markets cautious.
Despite the fall in value, the 524 deals reported in the first nine months of the year were a slight growth of six per cent in 2021.
UAE leads M&A activity in region
The UAE was the leader in M&A activity in the MENA region as it saw 155 deals signed worth $17.2bn in the first nine months of 2022.
Egypt was the next most active with 99 deals worth $3.9bn. Saudi Arabia followed with 58 deals worth $3.4b and Oman saw 10 deals inked with a total value of $700m.
Anil Menon, Head of MENA M&A and ECM Leader, EY, said: “What is interesting from these latest results is the increasing M&A activity, not just emanating from traditional markets such as the UAE and Saudi Arabia, but also from other countries across the MENA region, namely Egypt, Morocco, Qatar and Oman.
“Higher crude oil prices, combined with favourable regional government initiatives in attracting investments to the region and MENA investors looking for futuristic investment opportunities in foreign markets will be the major drivers of M&A activity in the region going forward.”
According to the report, domestic deals were the main driver of activity in the region, contributing 51% and 33% of the total M&A deal volume and value respectively over the nine-month period.
M&A activity involving private equity or sovereign wealth funds accounted for 35% and 38% of the total deal volume and value respectively across the nine months.
Brad Watson, EY MENA Strategy and Transactions Leader, said: “Although we are living in uncertain economic times, the MENA region continues to record higher M&A activity, fuelled by expected economic growth through higher oil prices and an acceleration in business-friendly reforms.
“Technology is driving a large number of deals, reflecting the rising digital transformation across industries in the region.”
Rising oil prices and the easing of government travel restrictions resulted in higher inbound deal volume in the MENA region, with 119 deals so far this year with 105 deals in the corresponding period the previous year.
The UAE is still a favourite destination for investors as it saw 62 deals worth $7.4bn, supported by the reforms to strengthen its business environment, attract foreign investment, and incentivise companies to set up or expand their operations.
The technology sector witnessed the highest deal activity in terms of deal volume and out of 37 technology deals, 23 deals were flowing into the UAE, reflecting the regional government’s appetite for digital transformation.
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