The mergers and acquisitions (M&A) in the Middle East and North Africa (Mena) region have reached new heights in 2022 with 754 deals, according to Ernst & Young (EY).
The region, which has historically been a 500-600 deals market, recorded a 13% growth in deal volume over 2021, EY said in its report.
"Improving market conditions due to the highest oil prices within the last six years, business-friendly reforms, and easing of government travel restrictions have boosted investor confidence, catalysing a surge in M&A activity in the region," it said.
Domestic deals represented 51% of the total M&A deal volume at 388 and 34% of the value at $28.4bn.
Outbound deals led in value with $40.1bn and a total number of 201, while 165 inbound deals amounted to $14bn in total disclosed value.
The region saw 137 deals involving government-related entities (GRE) in 2022, which was 78% higher than 2021 and the highest number since 2017, it said, adding the GRE-involved deals accounted for 49% of the total disclosed deal value at $40.3bn.
In terms of sectors, technology made up 25% of the total deal volume. In a bid to position itself as a hub for tech start-ups, the Mena region continues to improve ease of doing business while enacting favourable legislation across industries and creating an enabling investment landscape.
"After a resurgence in 2021, M&A activity in the Middle East reached new heights last year, testifying to the success of companies adjusting their M&A strategies to the needs of the changing market. Continuing a strong run, domestic deals were a significant driver of deal volume in the region," said Brad Watson, EY Mena Strategy and Transactions Leader.
Anil Menon, EY Mena head of M&A and Equity Capital Markets, said the macro-economic challenges in the US and Europe have triggered a retreat of capital to the Mena region with the GREs and regional strategies leading the pack.
"Large cap players are super active and hunting. The unprecedented volume of deal activity in 2022 is a clear reflection of an exceptionally buoyant deal environment, which we expect will continue in 2023,” he said.
