Latest news with #GregoryGarnier
Gulf Business
11-03-2025
- Business
- Gulf Business
Private equity rebound gains momentum amid challenges, shows report
Image: Getty Images The global private equity (PE) landscape is witnessing a resurgence, with dealmaking activity gaining traction in 2024. However, lingering economic uncertainties and sluggish fund-raising continue to pose significant challenges to a full-scale recovery. Global PE Report, released in March, highlights a cautiously optimistic outlook for the industry, as both investments and exits show clear signs of revival after a prolonged downturn. Investment and exit recovery signals renewed confidence Following two years of sharp declines, PE investments and exits rebounded in 2024, marking a crucial turning point for the industry. Pent-up demand among general partners (GPs) to deploy capital, alongside improving economic conditions and central bank interest rate cuts, fuelled a 37 per cent year-on-year rise in buyout investment value to $602bn (excluding add-on deals). Exit activity also showed strong momentum, with global exit value climbing 34 per cent to $468bn. The exit count increased by 22 per cent to 1,470, suggesting a gradual thaw in the liquidity freeze that had constrained capital distributions to limited partners (LPs). Despite this positive momentum, a backlog of 29,000 unsold companies remains, underscoring the need for further market improvements. Navigating a complex macroeconomic ecosystem Bain's analysis underscores the importance of adapting to a dynamic macroeconomic environment in 2025. Factors such as inflation trends, interest rate fluctuations, trade policies, and geopolitical uncertainties remain critical variables influencing deal activity. ' 'We think the headwinds that have held back activity since mid-2022 should continue to dissipate. The industry is anxious to make deals, GPs are finding creative ways to boost liquidity, more dollars should flow in from sovereign wealth funds and private wealth, and returns remain strong. But deal appetite is still tempered by the uncertainties keeping markets on edge,' he added The Middle East's expanding private equity landscape Gregory Garnier, Middle East head of Bain's Private Equity practice, pointed to the region's growing appeal for investors. 'The Middle East is entering a dynamic period of growth and transformation, creating unprecedented opportunities for investors. As economies diversify and sectors such as technology, renewable energy, and infrastructure gain momentum, private equity firms have a unique chance to drive meaningful value.' He emphasised that forward-thinking funds leveraging regional expertise and strategic partnerships will be best positioned for success. Global trends in dealmaking and exits Bain's report outlines strong growth in deal value across regions, with take-private transactions dominating high-value deals. Europe led the recovery with a 54 per cent rise in deal value on a 9 per cent increase in deal count, while North America saw a 34 per cent increase in value. The Asia-Pacific region recorded an 11 per cent rise in deal value, although weaker growth in China and a decline in Japan weighed on overall performance. Public-to-private deals surged to $250bn globally, representing almost half of all deals over $5bn in North America. The technology sector remained a focal point, accounting for 33 per cent of buyout deals by value. The financial services and industrial sectors also experienced significant growth, with deal values jumping 92 per cent and 81 per cent, respectively. Exits rebounded strongly, driven by a 141 per cent increase in sponsor-to-sponsor transactions, which totalled $181bn in 2024. However, strategic exits remained flat, and IPO activity continued to lag, representing just 6 per cent of exits by value. Despite the uptick in exits, distributions to LPs dropped to 11 per cent of net asset value — the lowest in a decade — indicating that liquidity challenges persist. Fundraising faces continued pressures Fundraising remained sluggish in 2024, marking the third consecutive year of decline. Total capital raised fell 24 per cent year-on-year and is down 40 per cent from the 2021 peak of $1.8tn. The number of funds closed dropped by 28 per cent to 3,000 — about half the pre-pandemic annual rate. Buyout funds, while still the dominant asset class, raised 23 per cent less capital than in 2023, with total buyout fund-raising 11 per cent below the five-year average. Limited partners (LPs) are becoming increasingly selective, directing capital towards the largest and most experienced funds. This trend has enabled top-quartile managers to raise significantly larger follow-on funds, while many lower-quartile firms struggle to meet targets. Private equity competition Bain's report highlights structural shifts that will reshape the PE industry. Rising costs, intensified competition for deals, and mounting pressure on management fees are creating a more challenging operating environment. As scale becomes increasingly important, large firms are leveraging their advantages to secure capital and expand market share. Bain anticipates that mergers and acquisitions within the alternative asset management industry will play a greater role, with 180 transactions recorded since 2021. Looking ahead, private equity firms must redefine their strategies to maintain a competitive edge. Bain emphasises that success will depend on differentiation, operational excellence, and the ability to navigate a rapidly evolving investment landscape.
Arabian Business
09-02-2025
- Business
- Arabian Business
Middle East M&A activity surged 52% to $29bn last year, global uplift expected in 2025
The Middle East saw a notable surge in M&A activity in 2024, with deal value reaching $29bn, a 52 per cent increase from the previous year. Sovereign wealth funds and government-related entities continue to dominate the region's M&A landscape, with Saudi Arabia and the UAE comprising the majority of this deal value. In particular, the energy and natural resources sectors remain pivotal, with energy-related deals representing nearly 80 per cent of total deal value. Middle East M&A activity Notably, the largest deal of the year was Saudi Arabian Oil Co.'s acquisition of Rabigh Refining & Petrochemical Co. for $8.9bn. Additionally, advanced manufacturing and technology sectors have seen impressive growth, with tech-related deals doubling in value. Gregory Garnier, Partner at Bain & Company and head of the Private Equity and Sovereign Wealth Fund practice in the Middle East, said: '2024 has proven to be a transformative year for the region's M&A activity. 'With continued support from government entities and strong cross-regional investments, particularly in Europe, the Middle East is well-positioned to continue driving high-value strategic acquisitions, especially in energy transition and technology sectors. 'The UAE's investor-friendly regulations are further enhancing the region's role as a key global player in M&A.' Middle Eastern acquirers have also ramped up investments in Europe, with a 120 per cent increase in strategic deal value for European targets. This trend contrasts sharply with a significant drop in investments in the Asia-Pacific region, where strategic deals fell by 78 per cent in 2024. Local companies are also showing a marked interest in joint venture activities, particularly within industrial sectors such as renewable energy. Saudi Arabia's sovereign wealth fund, for example, completed three joint ventures for solar and wind projects last year. After three years of underwhelming global M&A activity, 2025 may finally be the year the M&A market breaks through. In its Global M&A Report 2025, Bain & Company says it expects the two biggest inhibitors to recent deals—interest rates and regulatory challenges—will ease in 2025. M&A and divestitures will be critical tools for companies navigating shifting profit pools amid technology disruption and a post-globalisation economy, the firm says. Les Baird, partner at Bain & Company and head of the firm's global M&A and Divestitures practice, said: 'M&A activity tends to be cyclical, and we believe the market is poised for an upturn. While we saw a modest recovery last year, deal value remains historically low as a percentage of global GDP as headwinds have stifled dealmaking for the past three years. 'Even throughout the slow period, the best companies have persisted, learning how to navigate unfavourable market realities to deliver inorganic growth. Now, as headwinds become less acute, more companies will join those that have learned how to adapt.' Intrinsic demand for deals remains high, even if activity is still muted today, Bain says. M&A is central to business strategy as companies seek pathways to grow as they balance risk and reward during a period of uneven economic outlooks, supply chain disruptions, and geopolitical tensions. And financial sponsors are eager to put money to work, too. Moreover, the pipeline of supply has been building. Everyone, from corporates refocusing their strategies to private equity and venture capital firms pressured to provide liquidity, seems to have at least a few assets that they wish to sell once the market comes back and valuations rise. Meanwhile, new administrations in the EU and US are ushering more openness to M&A. In 2025, strategic dealmakers will look beyond near-term swings in market momentum to find the right deals to be competitive, profitable, and enable sustainable growth. Technology disruption is the long-term shift that will result in the most strategic transformation and M&A in the years ahead. Generative AI/AI, automation, renewable energy, and quantum computing are just a few of the technologies that companies will need to build or buy to maintain competitive offerings and cost positions. Tech and non-tech companies alike will continue to have voracious appetites for tech deals to retool their businesses. Post-globalisation and shifting profit pools will also continue to drive deals, as executives reevaluate their global footprints to ensure access to attractive end markets and security of supply while adapting their strategies toward shifting profit pools of all types. Bain's survey of more than 300 M&A practitioners found 21 per cent are currently using generative AI for M&A—up from 16 per cent a year ago—and one in three expect to be using it by the end of the year. Bain's research shows even higher rates of adoption among the most acquisitive corporates and private equity firms. While the most common use cases currently revolve around finding and validating deals, Bain expects every single step of the M&A process will be enabled by generative AI in the next five years. In addition to relying on generative AI–enabled tools to accelerate sourcing, screening, and diligence, early adopters have started experimenting with the technology for integration and divestiture planning as well as program management. Within the next 12 months, Bain expects early adopters will use generative AI tools to draft integration workplans and transition service agreements (TSAs) in less than 20 per cent of the time than they previously spent on such activities. The wave after that will involve using generative AI tools to access specific company data to help size realistic cost and revenue synergies and to craft value creation plans based on the prior performance of their acquisitions. Bain & Company's report explores trends in strategic M&A across 12 industries and 10 regions, including: Consumer products: Despite a few large acquisitions, consumer products deal value dropped by 19 per cent in 2024. Many are continuing to evaluate and divest low-growth and noncore parts of their portfolios. Bain's survey found 60 per cent of consumer products executives expect to sell assets over the next three years. They listed stakeholder support, tax implications, and availability of buyers as the top three most important factors in deciding to divest Energy and natural resources: Oil and gas companies enjoyed a wave of consolidation in 2024, and chemicals companies reshaped portfolios. The energy sector engaged in more than $400bn in deals, a three-year record. The companies executing the largest deals are getting more synergies from their dealmaking, and they're achieving those synergies more quickly: run-rate synergy value has increased while realisation timeline has decreased in recent years Financial services: Technology, regulation, and shifting customer demands conspired to drive executives in the financial services arena back into the M&A market during 2024. Total deal value in the financial services market grew to $309bn in 2024, with banking and finance accounting for the largest share of deals, and cards and payments representing the biggest growth. Bain expects momentum to continue as banks acquire for scale leadership, insurers refocus on core lines of business, and fraud prevention and identity verification are hot areas for acquisitions in payments Media and entertainment: Big tech's push into media and gaming has led traditional media companies to consolidate to build scale within their core business as a way to compete. They are also using scope deals to expand across sectors. In 2024, more than half of media and entertainment M&A involved either a target or acquirer outside of the industry Retail: Despite enhanced regulatory oversight, the retail industry saw a rebound in M&A value and volume in 2024, with headlines dominated by one megadeal. And retail practitioners show no sign of letting up on dealmaking—Bain's survey found 75 per cent expect to continue both the same number and size of deals in 2025
Arab News
05-02-2025
- Business
- Arab News
Middle East M&A value surges 52% to reach $29bn in 2024: Bain & Co.
RIYADH: Saudi Arabia and the UAE led a surge in mergers and acquisitions across the Middle East in 2024, with total deal value reaching $29 billion, according to a Bain & Co. report. Sovereign wealth funds and government-related entities were the driving force behind the 52 percent increase from the previous year, with the Kingdom and the UAE accounting for the majority of the region's deal value. The Middle East recorded the highest M&A deal value growth in 2024 compared to other regions, with North America seeing a 2 percent rise, although still posting a total of $1.2 trillion — while Europe recorded a 9 percent rise to $528 billion. Deals involving energy and natural resources remained dominant in the Middle East market, representing nearly 80 percent of the total value. The largest transaction of the year was Saudi Aramco's $8.9 billion acquisition of Rabigh Refining and Petrochemical Co., underscoring the continued focus on energy-related deals, according to the report. Gregory Garnier, partner at Bain & Co. and head of the Private Equity and Sovereign Wealth Fund practice in the Middle East, described 2024 as 'a transformative year' for the region's M&A activity. 'With continued support from government entities and strong cross-regional investments, particularly in Europe, the Middle East is well-positioned to continue driving high-value strategic acquisitions, especially in energy transition and technology sectors,' he added. The report also highlighted that advanced manufacturing and technology emerged as growing areas of investment, with technology-related M&A deals doubling in value. Middle Eastern investors have expanded their reach into European markets, with deal values for targets rising 120 percent in 2024. In contrast, investment activity in the Asia-Pacific region saw a steep decline, with strategic deal values dropping by 78 percent over the same period. Local firms are also growing interest in joint ventures, particularly in industrial sectors such as renewable energy. This surge in activity in the Middle East was driven by sovereign wealth funds, economic diversification, and investor-friendly reforms, with the Kingdom and the UAE leading in energy, tech, and industrial acquisitions. Diversification efforts beyond oil also contributed to the region's M&A growth, with investment strategies such as those of Saudi Arabia's Public Investment Fund signaling a clear intent to establish a strong presence across multiple sectors. PIF completed three joint ventures focused on solar and wind projects last year, reinforcing the country's commitment to diversifying its energy investments. The sovereign wealth fund entered joint ventures with Envision Energy and Vision Industries to manufacture wind turbine components, and with JinkoSolar and Vision Industries to establish a solar cell and module production facility. Additionally, PIF partnered with China Energy Engineering Corp., ACWA Power, and Saudi Aramco Power Co. to construct a 2 gigawatt solar power plant. The Middle East's strong M&A performance contrasts with a period of sluggish dealmaking worldwide. According to Bain & Co., global M&A activity has remained historically low relative to gross domestic product over the past three years, as high interest rates and regulatory hurdles constrained dealmaking. Germany was among the countries to experience a decline in M&A activity, posting a 7 percent drop, while India saw deal value decrease by 16 percent year-on-year. However, the report suggests that 2025 could mark a turning point as these inhibitors ease and companies increasingly turn to M&A and divestitures to navigate shifting profit pools amid technological disruption and a post-globalization economy.
