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The Middle East’s dealmaking climate is favourable for 2024 as it will be boosted by decarbonisation and diversification, PwC has said.
The growth of the region’s non-oil sector, rising private sector participation and robust capital markets activity is driving M&A activity, a new report by the company said.
The impact of the factors including technological disruption and climate change will continue to drive investment, either regionally or outbound, in key areas such as energy transition and digital transformation, according to the 2024 TransAct report.
The report said dealmakers must prioritise reinventing business models, focus on talent acquisition and remain agile in navigating market changes, and that mid-market deals dominate as investors focus on value creation.
“Despite the slower growth rate experienced by the global economy, the Middle East has remained resilient, supported by solid economic fundamentals and supportive government policies,” the report said.
“This resilience has boosted stability and investor confidence in the region, leading to a relatively active deal market compared to other regions that have been more susceptible to higher interest rates and recessionary fears.”
Despite notable declines in comparison to 2022, it is anticipated that the deals market will remain active and grow in many sectors in 2024 as governments continue to advance their strategic agendas and diversify their economies, the report added.
Imad Matar, transaction services leader at PwC Middle East, said deal making had remained resilient in Saudi Arabia and that an expansion of activity in the non-oil private sectors, particularly infrastructure, industrial manufacturing, and clean technology industries, is expected.
“In 2023, Saudi Arabia saw less substantial declines in deal volume. IPO activity has also remained strong, and we are confident that the region will continue to see a strong pipeline coming through in 2024.”
He added: “We expect the positive momentum to continue as the government privatises state assets and encourages private sector companies to list in a bid to attract investment, push reforms and move away from dependency on fossil fuels.”
(Writing by Imogen Lillywhite; editing by Seban Scaria)
