Mergers and acquisitions (M&A) activity in the region is unusual in line with the general pattern of a slowdown in global M&A deal activity, a report said.
According to the report “Gulf exceptionalism creates M&A opportunities despite global headwinds” published by professional services firm PwC, it managed to maintain an impressive upward trajectory in 2022, with a series of more than 10 deals across different industries. billion dollar deal.
This is due to “Gulf exceptionalism”, which is due to favorable regional dynamics, such as higher oil prices and greater fiscal discipline, which contribute to greater economic flexibility and relatively high growth in the region. Furthermore, the bulk of Middle East M&A activity in 2022 was concentrated in the UAE, Saudi Arabia and Egypt, with a total of 563 deals recorded, accounting for 89% of the region’s total deal volume.
The UAE and Saudi Arabia saw the fastest year-over-year growth in deal volume, with deal volume up 9% and 6%, respectively. In the UAE, deal activity has focused on consumer markets, technology, industrials and financial services, supporting the country’s efforts to diversify away from oil and gas.
Fundraising continues to drive capital flows in 2022, and the region remains an attractive target for venture capital (VC) funds. Some of the key emerging M&A themes for 2022 include:
• Deep resources available to support M&A investments
• A higher interest rate environment should spur a greater focus on value creation
• Strong emphasis on technology and infrastructure
• Continued cross-border mergers and acquisitions to create national and regional leading enterprises
• The energy transition is creating new M&A opportunities
Romil Radia, Deal Markets Leader, PwC Middle East, commented: “The Middle East is certainly not immune to the economic headwinds affecting M&A elsewhere, but at the start of 2023, sentiment here is more bullish than most global markets, and there is strong interest from the Middle East. Some momentum last year continued into 2023. Favorably, the region has deep financial resources available for transactions, supporting outbound and cross-border transactions. There is also huge potential for the energy transition, and as transition initiatives continue regionally, people will There will be a focus on technology and digital acquisitions.”
According to the report, current market conditions in early 2023 suggest that the Middle East is a rare global sweet spot for M&A, provided companies have a cohesive strategy and the right financial resources to pursue transformational deals. – trade arab news agency