The Middle East and North Africa (MENA) region witnessed resilient mergers and acquisitions (M&A) activity in 2023, with the total deal value rising by 4% year-on-year to $86 billion, according to Ernst & Young (EY).
M&A landscape
The region recorded 565 M&A deals with a total value of $83.2 billion during 2023, according to the latest EY MENA M&A Insights report released Monday.
Domestic deals remained dominant at 49% in terms of volume. Cross-border deals accounted for a 72% share in overall value, recording a 14% year-on-year growth in deal value.
The UAE and Saudi Arabia remained popular investment destinations, with a combined deal volume of 305 and a deal value of $24.8 billion. The US remained the favorite target destination for UAE investors, with 21 deals worth $15.3 billion.
Outbound deals accounted for a major chunk of the M&A deal value in 2023, with a total of 208 deals amounting to $53.5 billion. The technology sector accounted for most of the volume, with 141 deals, and in terms of deal value, chemicals ranked at the top spot with a deal value of $17 billion.
The largest acquiring region in terms of value was North America, with transactions totaling $2.7 billion and the highest number of inbound MENA deals at 32.
Crucial quote
“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,” said Brad Watson, EY MENA strategy and transactions leader
Top deals
Sovereign wealth funds (SWFs), including the UAE’s Mubadala, Abu Dhabi Investment Authority (ADIA), Saudi Public Investment Fund (PIF), and the Qatar Investment Authority (QIA), played a major role in propping up the deal activity in the region.
The biggest M&A of 2023 took place in the UAE as Apollo Global Management and ADIA announced the acquisition of Univar Solutions for $8.2 billion. The acquisition of US game developer Scopely by the PIF-owned Savvy Games Group for $4.9 billion stood at the second spot, while the third spot is held by the acquisition of the UAE’s Cvent Holding by Blackstone and ADIA for $4.7 billion.
Inbound deals in the oil and gas sector grew in terms of volume and value in 2023, with Total Energies’ acquisition of stakes in multiple oil fields for $1.6 billion, accounting for 97% of inbound deal volume. The chemicals sector recorded a significant rise in deal value to $4.7 billion, while the metals and mining sectors’ deals stood at $3.4 billion.
Contra
LSEG’s investment banking analysis for MENA released late last month said that the region’s M&A activity fell 7% year-on-year to $80 billion in 2023, the lowest since 2020, driven by an 18% fall in transactions.
