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.
