Reports for investment in the Middle East and North Africa (MENA) region reveal that the UAE received the highest inbound investment in the area. The country completed 20 deals in the first six months of 2019, and these deals are worth a total of $14.4 billion. Some of the biggest deals in this period involved oil giant Adnoc and ride-hailing firm, Careem.
A massive chunk of the $14.4 billion came from the oil and gas sector, which was the top target for inbound investment. Out of the six deals in the oil and gas sector, which were completed in the MENA region, four were in the UAE. There were three mega-deals in the country, and one of these is Adnoc’s stake sake in its oil refining and pipeline business. Deals involving oil and gas accounted for $10.8 billion.
Deals in the MENA region
Sixty-five outbound deals were witnessed in the MENA region, and these deals amount to a total of $21 billion. The first half of 2018 saw the region complete seventy-seven deals which were worth $18.2 billion. According to a report by EY, strategic investments by sovereign wealth funds and state-owned enterprises, including mega deals by Adia and Saudi Aramaic, drive MENA’s outbound activity.
The first half of 2019 saw the region experience a fall in inbound M&A deals. In the first six months of 2018, the region completed sixty-nine deals worth $12.3 billion and this year, there were forty deals worth $15.1 billion completed. Across the region, the value of M&A deals increased by 221% to $115.5 billion in the first half of 2019.
Saudi Aramco’s landmark deal is the main factor that has increased the value of M&A deals in the region. The deal saw Saudi Aramco acquire a 70% stake in Sabic worth $69.1 billion from Saudi Public Investment Fund.
Top five sectors
Of all the deals struck in the MENA region, five sectors stand out due to the value of the deals that were completed in those industries. Top of the pile is the chemicals sector thanks to the Saudi Aramco-Sabic deal. The industry has a deal value of $69.3 billion.
The second secure is the oil and gas sector with $14.2 billion. They provide care sector comes in at third with a deal value of $10.3 billion while the banking and markets sector recorded $5.1 billion in deal value. The technology sector completes the list with a recorded value of $4.3 billion, of which $3.1 billion came from Uber’s acquisition it Careem networks.
The EY report showed that 61% of executives say that their companies are reviewing their portfolios at least every quarter. Their rate of review is higher than the average globally and the fuels deal activity in the region. The majority of executives in the MENA also believe that the global economy is improving and this helps them shape their companies’ portfolios.