Middle East M&A market resilient in 2024 as AI, renewables and infrastructure deals stand out
Middle East mergers and acquisitions (M&A) deals volumes experienced a modest decline of only 4 per cent, from 493 deals in 2023 to 475 in 2024, according to a PwC report.
Despite the decline, the region significantly outperformed the global market's decline of 17 per cent.
The PwC report, titled 'Bold moves: Big bets, bigger growth, highlighting key mergers and acquisitions (M&A) in the Middle East in 2024', highlights resilience and optimism in the region.
Middle East M&A activity
Large-scale transactions in AI, renewable energy, and infrastructure fuelled the region's M&A momentum.
Romil Radia, Deals Markets Leader, PwC Middle East, said: 'In 2024, the Middle East's M&A market demonstrated remarkable resilience and confidence, driving strategic investments in sectors such as AI, renewable energy and infrastructure.
'The region saw a notable rise in large-ticket deals, reflecting the bold ambitions of investors to accelerate regional diversification, bringing in new capabilities and strategic expertise to strengthen key industries and help develop the newer sectors.
'Sovereign wealth funds and Middle East corporates are actively expanding their global footprint, positioning themselves for an even bigger push in 2025.'
Key themes arose within the regional M&A market in 2024 with examples such as:
Technology and AI drives business reinvention: Bayanat AI's $1.5bn acquisition of Al Yah Satellite Communication has reinforced its leadership in advanced technology. Moreover, Qatar's Ooredoo secured $550mn to expand AI and data centre infrastructure, further strengthening the region's digital transformation. Meanwhile, Saudi Arabia's 'Project Transcendence,' a $100bn AI investment initiative, underscores the country's long-term commitment to deep tech and innovation
Sovereign Wealth Funds (SWFs) continue to shape homegrown economic growth: SWFs continue to prioritise investments in local businesses, industries and projects, where dealmaking will likely increase in sectors critical to the region's long-term economic goals. This could lead to a greater number of domestic deals as companies look to align with national priorities and regulatory frameworks that support local development
Green energy transitions drive new investment strategies: Masdar's $2.7bn acquisition of Greece's Terna Energy highlights the Middle East's leadership in renewable energy, reinforcing its commitment to sustainability
Increasing private participation aids diversification: Saudi Arabia's healthcare sector now sees 53 per cent of investments coming from the private sector, reflecting the country's push toward economic diversification. Meanwhile, Egypt's historic $35bn ADQ-led investment deal marks a significant step in its privatisation efforts, attracting foreign capital and fostering private sector growth across key industries
Global PE could fuel Middle East M&A boom: The global private equity market saw a surge in large-scale transactions, with the number of deals valued over $1bn rising from 430 in 2023 to more than 500 in 2024, driving an 11 per cent rise in average deal sizes. This reflects the global trend of increased asset supply expected to come to the market, driven by the increasing pressure on PE players to exit mature portfolio company investments. In the Middle East, there was a slight uptick in PE deal volumes with inbound deals playing a significant role in PE activity, totalling 108 transactions. Additionally, while only one regional deal exceeding $1bn was recorded in 2023, 2024 saw five such deals, with the largest reaching $3.6bn highlighting growing investor confidence in the region
The Middle East's M&A landscape is expected to continue its expansion, with more than 50 per cent of regional CEOs planning acquisitions within the next three years. AI, digital transformation, and sustainability are expected to drive dealmaking, while Saudi Arabia, the UAE and Egypt accelerate privatisation to attract private sector investment.
Additionally, cross-border M&A and rising foreign investment are expected to reshape the market, further solidifying the region's position as a global economic hub.
The continued creation of new sectors and sustained investment in high-growth areas should provide globally-minded corporations with compelling incentives to invest in the region.
These factors will empower dealmakers to unlock significant growth opportunities in 2025 and beyond.
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