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Merger and acquisition (M&A) deals in the Middle East and North Africa (MENA) have returned to pre-pandemic levels, with green activity reaching a peak in 2021, making up 10.3% of transactions.
Consultants BCG said total deals reached a value of $23.8 billion in the first nine months of 2022, across 283 deals, and up 16% from the previous year.
In its new report, BCG said green deals have quadrupled since 2001 and that environmental considerations will motivate an increasing number, despite unfavorable macroeconomic conditions.
BCG said green M&A has been growing particularly quickly in industries that are at the forefront of the energy transition and in emerging markets, with the Middle East showing the highest level of green activity globally.
Over the past decade, the energy and utilities industry saw the highest share of green M&A and the largest increase, showing a 98% increase in deals from 2020-2021, the report said.
In the region, green M&A increased from 5% of the total number of transactions in 2020 to 10.3% in 2021, suggesting that more dealmakers are recognising the value-creating potential of the transactions, BCG said.
“Green deals are very hot in the region. Soaring sustainability transactions in the Middle East are a clear outcome of established national transformation programs seeking out diverse economic outputs for countries on their path to net zero,” said Ihab Khalil, Managing Director and Senior Partner at BCG.
“As the region continues grounding itself as a hub where collaboration and diversification can bear fruit, so will green mergers and acquisitions.”
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)
