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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
Hi Dubai
07-02-2025
- Business
- Hi Dubai
Global M&A Market Set for Strong Rebound in 2025, Bain & Company Report Finds
After three years of sluggish mergers and acquisitions (M&A) activity, the global M&A market is poised for a resurgence in 2025, according to Bain & Company's latest Global M&A Report. The report attributes the expected rebound to easing interest rates, regulatory shifts, and a growing need for businesses to adapt to technological disruption and post-globalization challenges. M&A Gains Traction Amid Economic Uncertainty Despite persistent economic volatility, shifting supply chains, and geopolitical tensions, companies are increasingly turning to M&A as a strategic tool for expansion, consolidation, and innovation. According to Les Baird, Partner and Global Head of M&A and Divestitures at Bain & Company, M&A activity is cyclical and 2025 is expected to mark a turning point: 'While we saw a modest recovery last year, deal value remains historically low as a percentage of global GDP. However, as market headwinds ease, more companies will re-enter the dealmaking landscape.' Key Drivers of the M&A Upsurge Bain's report highlights several factors fueling the M&A resurgence: Technology Disruption: Generative AI, automation, quantum computing, and renewable energy are driving strategic acquisitions. Generative AI, automation, quantum computing, and renewable energy are driving strategic acquisitions. Regulatory Easing: New policies in the EU and US are expected to foster a more favorable M&A environment. New policies in the EU and US are expected to foster a more favorable M&A environment. Private Equity Resurgence: Financial sponsors, including private equity firms, are eager to deploy capital as markets stabilize. Financial sponsors, including private equity firms, are eager to deploy capital as markets stabilize. Asset Pipeline Growth: Corporations reassessing strategies, PE firms seeking liquidity, and distressed asset sales are fueling a strong pipeline for dealmaking. Generative AI Transforming M&A Processes The report reveals a rising adoption of generative AI to optimize M&A transactions. A survey of 300+ M&A professionals found that: 21% already use AI in dealmaking ( up from 16% last year ). already use AI in dealmaking ( ). One-third expect to integrate AI into their M&A strategies by the end of 2025. According to Baird, AI will reshape every stage of the M&A process, from deal sourcing and due diligence to integration planning: 'AI will drastically accelerate traditional processes, enabling firms to complete integration and divestiture planning in a fraction of the time.' Middle East: A Rising M&A Powerhouse The Middle East emerged as a key player in global M&A, with deal values surging 52% in 2024 to reach $29 billion. Sovereign wealth funds and government-backed entities in the UAE and Saudi Arabia dominated the region's M&A activity, particularly in: Energy & Natural Resources – Nearly 80% of regional deal value . – Nearly . Advanced Manufacturing & Technology – Attracting significant investments. Major Transactions: Saudi Aramco's $8.9 billion acquisition of Rabigh Refining & Petrochemical. Cross-border acquisitions in Europe surged by 120%, reflecting a strategic shift toward European investments. Meanwhile, Asia-Pacific investments dropped by 78%, indicating a change in Middle Eastern investor focus. 'With continued government backing and strong cross-regional investments, the Middle East is set to drive high-value strategic acquisitions,' said Gregory Garnier, Partner and Head of Bain's Private Equity and Sovereign Wealth Fund Practice in the region. Sector-Specific M&A Trends Bain's report outlines key industry trends shaping the global M&A market: Energy & Natural Resources – Hit a record $400 billion in 2024, fueled by oil & gas consolidation and portfolio reshaping. – Hit a record $400 billion in 2024, fueled by oil & gas consolidation and portfolio reshaping. Financial Services – $309 billion in M&A deals, with banks scaling up and insurers focusing on fraud prevention and identity security. – $309 billion in M&A deals, with banks scaling up and insurers focusing on fraud prevention and identity security. Consumer Products – 19% drop in M&A activity, as firms prioritize divesting low-growth assets. – 19% drop in M&A activity, as firms prioritize divesting low-growth assets. Retail – After regulatory hurdles, the sector rebounded, with 75% of retail executives planning more acquisitions in 2025. – After regulatory hurdles, the sector rebounded, with 75% of retail executives planning more acquisitions in 2025. Media & Entertainment – Traditional media giants consolidating to compete with Big Tech. Outlook for 2025 With regulatory and financial pressures easing, M&A is expected to gain momentum in 2025, driven by: Tech-driven acquisitions. Strategic realignments in key industries. Growing investor confidence in stabilizing markets. As companies seek to navigate an evolving global landscape, M&A will remain a critical tool for growth and transformation. With the Middle East playing an increasingly pivotal role, 2025 is shaping up to be a landmark year for dealmaking. News Source: Gulf Business
Zawya
05-02-2025
- Business
- Zawya
M&A market poised for a comeback in 2025 as headwinds ease, finds Bain & Company
A Bain survey found one in three M&A practitioners will be using generative AI in dealmaking by the end of the year The Middle East saw a 52% increase in M&A deal value in 2024, with sovereign wealth funds and government-related entities leading the charge in sectors like energy, technology, and advanced manufacturing Bain predicts generative AI will enable every step of the M&A process in the next five years Dubai, UAE – After three years of underwhelming M&A activity, 2025 may finally be the year the M&A market breaks through. In its Global M&A Report 2025, published today, 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-globalization economy, the firm says. 'M&A activity tends to be cyclical, and we believe the market is poised for an upturn,' said Les Baird, partner at Bain & Company and head of the firm's global M&A and Divestitures practice. '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 unfavorable market realities to deliver inorganic growth. Now, as headwinds become less acute, more companies will join those that have learned how to adapt.' Forces behind the upswing 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-globalization 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. Generative AI in M&A Bain's survey of more than 300 M&A practitioners found 21% are currently using generative AI for M&A—up from 16% 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% 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. Middle East Market Outlook: Strong Growth and Strategic Shifts The Middle East saw a notable surge in M&A activity in 2024, with deal value reaching $29 billion, a 52% 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% of total deal value. Notably, the largest deal of the year was Saudi Arabian Oil Co.'s acquisition of Rabigh Refining & Petrochemical Co. for $8.9 billion. Additionally, advanced manufacturing and technology sectors have seen impressive growth, with tech-related deals doubling in value. '2024 has proven to be a transformative year for the region's M&A activity,' said Gregory Garnier, Partner at Bain & Company and head of the Private Equity and Sovereign Wealth Fund practice in the Middle East. '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% 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% 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. Industry perspectives 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% in 2024. Many are continuing to evaluate and divest low-growth and noncore parts of their portfolios. Bain's survey found 60% 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 & 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 $400 billion 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 realization 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 $309 billion 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 & 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% expect to continue both the same number and size of deals in 2025.
Gulf Business
05-02-2025
- Business
- Gulf Business
Global M&A market poised for a comeback in 2025, finds report
Image: Getty Images After three years of sluggish mergers and acquisitions (M&A) activity, the market is showing signs of resurgence in 2025, according to the latest Global M&A Report released today by Bain & Company. The consultancy firm predicts that easing interest rates and a shift in regulatory challenges will help pave the way for a significant recovery in M&A deals this year. The report underscores that M&A and divestitures will play a crucial role in helping companies adapt to rapid technological disruption and a post-globalisation economy. With economic uncertainty still prevalent, businesses are under pressure to find new avenues for growth, and M&A is expected to be a vital strategy. 'M&A activity tends to be cyclical, and we believe the market is poised for an upturn,' said Les Baird, partner at Bain & Company and head of the firm's global M&A and Divestitures practice. 'While we saw a modest recovery last year, deal value remains historically low as a per cent of global GDP, as headwinds have stifled dealmaking for the past three years. But as these headwinds become less acute, more companies will be poised to join those who have successfully adapted.' Forces behind the M&A upswing The demand for deals remains robust, even though activity has been subdued for a period. M&A remains a cornerstone of business strategy, especially for companies looking to expand, consolidate, or realign their operations in response to uncertain economic outlooks, shifting supply chains, and ongoing geopolitical tensions. Financial sponsors, including private equity firms, are also eager to deploy capital as the market starts to stabilise. The report also notes that governments and regulatory changes in the EU and US are expected to provide a more conducive environment for M&A deals in 2025. Looking ahead, technology disruption is expected to be the primary driver of M&A activity in the coming years. 'Generative AI, automation, renewable energy, and quantum computing are just a few of the technologies that will shape the next wave of strategic M&A,' Bain's report states. As companies across various sectors strive to stay competitive, both tech and non-tech companies will continue to seek tech acquisitions to bolster their offerings and operational efficiency. Generative AI: A game-changer for M&A Bain's research shows a growing trend in the use of generative AI to streamline and enhance the M&A process. The firm's survey of over 300 M&A professionals revealed that 21 per cent are already using generative AI to support dealmaking — an increase from 16 per cent in the previous year. By the end of 2025, one-third of M&A professionals are expected to incorporate AI into their processes. 'We expect that generative AI will fundamentally change every stage of the M&A process over the next five years,' said Baird. 'From sourcing and screening deals to conducting due diligence, AI tools will accelerate traditional processes and reduce timelines for critical activities such as integration and divestiture planning.' Bain anticipates that, in the near future, early adopters will use AI to draft integration work plans and transition service agreements in less than 20 per cent of the time it previously took, revolutionising how M&A transactions are executed and integrated. Middle East: A strategic player in M&A The Notable transactions include Saudi Arabian Oil Co's $8.9bn acquisition of Rabigh Refining & Petrochemical, as well as significant investments in advanced manufacturing and technology. 'The year 2024 has proven to be a transformative one for the region's M&A activity,' said Gregory Garnier, partner at Bain & Company and head of the firm's Private Equity and Sovereign Wealth Fund practice in the Middle East. '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,' he added. Middle Eastern investors are increasingly turning their focus to Europe, with a 120 per cent increase in deal value for European targets in 2024. Meanwhile, investments in the Asia-Pacific region have plummeted by 78 per cent, signaling a strategic shift in the region's approach to international acquisitions. Sector-specific insights Bain & Company's report also delves into sector-specific trends shaping M&A activity globally: Consumer products: While large acquisitions in the sector were few, the value of consumer products M&A fell by 19 per cent in 2024. Many executives in this space are focusing on divesting low-growth assets. Bain's survey shows that 60 per cent of consumer product leaders expect to sell assets in the next three years. Energy and natural resources: The energy sector saw a record $400bn in deal activity in 2024, led by oil and gas consolidation and portfolio reshaping in chemicals. Companies are achieving greater synergies from their deals, and more quickly, compared to previous years. Financial services: The financial services sector also witnessed robust dealmaking, with total value in the market reaching $309bn in 2024. Banks are acquiring for scale, while insurers are narrowing their focus to core businesses, particularly in the growing areas of fraud prevention and identity verification. Media and entertainment: Traditional media companies are consolidating in the face of competition from big tech, leading to an increase in M&A across various sectors. In 2024, more than half of media and entertainment deals involved targets or acquirers outside of the industry. Retail: After regulatory hurdles, the retail industry saw a rebound in both M&A volume and value in 2024, with major players eyeing continued expansion in 2025. Bain's survey found that 75 per cent of retail executives plan to maintain or increase the pace of dealmaking in the coming year. As global economic uncertainty persists, M&A activity is expected to rebound in 2025, driven by a confluence of factors including the easing of regulatory and financial pressures, a growing appetite for technology-driven acquisitions, and the strategic realignment of companies in response to evolving global trends. For investors and businesses alike, M&A will be a vital tool in navigating the rapidly shifting market landscape. With the Middle East continuing to play a pivotal role, particularly in energy and technology sectors, 2025 is shaping up to be a year of significant dealmaking activity.
