The value of mergers and acquisitions in the Middle East and North Africa region dropped to $55.2 billion through the first three quarters of 2022, despite a growth in the number of deals, as economic uncertainties weighed on activity, EY said in a report.
The value of activity declined 23 per cent year-on-year amid a modest 6 per cent rise in deals, which climbed to 524 from a year ago, as rising inflationary pressures, dampening demand and global market disruptions weighed on the sector, the London-based consultancy said in its EY Mena M&A Insights report on Monday.
The study said the UAE remained the top market for M&A activity, with 155 deals worth $17.2bn forged through the first nine months of 2022, followed by Egypt with 99 deals worth $3.9bn.
Saudi Arabia, the Arab world's largest economy, closed 58 deals worth $3.4bn. Morocco, with 22 deals valued at $1.9bn, and Oman, with 10 deals worth $700 million, rounded out the top five.
Despite the decreased value and challenging economic climate, the economic and technology strategies of Mena countries have helped it remain an attractive market for M&A activity, Brad Watson, strategy and transactions leader at EY Mena, said in the report.
“Although we are living in uncertain economic times, the Mena region continues to record higher M&A activity, fuelled by expected economic growth through higher oil prices and an acceleration in business-friendly reforms,” he said.
“Technology is driving a large number of deals, reflecting the rising digital transformation across industries in the region.”
Companies across the region are continuously considering and tapping into M&As, as they seek to gain access to or open up new markets, which in turn will strengthen their customer base and provide additional revenue streams to boost their bottom lines.
Domestic M&A activity inched down 3 per cent in the first nine months of 2022 on 268 deals, dragging its total value down 48 per cent to $18bn from $34.6bn a year ago, the EY report showed.
Notable deals during the nine-month period include Ghitha Holding's acquisition of Tamween Management for $2.4bn, Emaar Properties' takeover of Dubai Creek Harbour worth $2.042bn, Q Holding's acquisition of Reem Investments for $1.6bn and Saudi Arabia’s Public Investment Fund acquiring a 16.8 per cent stake in Kingdom Holding Company for $1.5bn.
In Abu Dhabi, one of the biggest deals was Alpha Dhabi Holding's acquisition of a 17 per cent stake in Aldar Properties for $1.452bn. Alpha Dhabi, a subsidiary of Abu Dhabi-listed conglomerate International Holding Company, eventually increased its stake to become the property developer's parent company.
Inbound deals into Mena, meanwhile, rose to 119 in the first nine months of the year, up from 105 a year earlier, with business-friendly reforms, rising oil prices and the easing of travel restrictions allowing for greater activity.
Higher crude oil prices, combined with favourable regional government initiatives in attracting investments to the region and Mena investors looking for futuristic investment opportunities in foreign markets will be the major drivers of M&A activity in the region going forward
Anil Menon,
head of Mena M&A at EY
The UAE remained the favoured investment destination, with 62 deals worth $7.4bn during the period. The technology sector was the most active: out of 37 technology deals in Mena, 23 deals flowed into the UAE, in line with the government's push for a digital-first economy.
The same factors are expected to create a more level playing field in Mena, with each country having its own propositions to attract inflows, said Anil Menon, head of Mena M&A at EY.
“What is interesting from these latest results is the increasing M&A activity, not just emanating from traditional markets such as the UAE and Saudi Arabia, but also from other countries across the Mena region, namely Egypt, Morocco, Qatar and Oman,” he said.
“Higher crude oil prices, combined with favourable regional government initiatives in attracting investments to the region and Mena investors looking for futuristic investment opportunities in foreign markets will be the major drivers of M&A activity in the region going forward.”
Outbound activity rose in the first nine months of 2022, with the value more than doubling to $27.2bn on 137 deals from $11.9bn on 113 deals a year ago.
The UAE again posted the highest number of outbound deals, with the biggest being telecom company e&'s acquisition of a 9.8 per cent stake in the UK’s Vodafone Group in a deal worth $4.4bn.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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