The UAE led the region’s mergers and acquisitions (M&As) activity in the first half of the year, as business-friendly government reforms continue to attract investors, according to a report by consultants EY.

The second-largest economy in the Gulf Cooperation Council (GCC) region logged 82 M&A deals worth $6 billion during the first half of 2023, followed by Saudi Arabia with 43 deals worth over $3 billion and Kuwait with seven deals valued at $2.2 billion.

The UAE recorded the largest transaction during the period, with the acquisition of Univar Solutions by Apollo Global Management and ADIA for more than $8 billion.

Across the Middle East and North Africa (MENA) region, a total of 318 M&A deals worth $43.8 billion were announced. The GCC region accounted for the huge chunk of the deals – 254, with a combined value of $42.5 billion.

“The UAE remained the favoured investment destination in the first half of the year, driven by government reforms that continue to attract investment into the country,” said Brad Watson, EY MENA Strategy and Transactions Leader.

Sovereign wealth funds

EY noted that sovereign wealth funds (SWFs), such as Abu Dhabi Investment Authority and Mubadala from the United Arab Emirates and the Public Investment Fund from the Kingdom of Saudi Arabia, continued to lead the deal activity in the region to support their countries’ economic strategies.

Ten of the largest deals in the region were also concentrated in the UAE and Saudi Arabia.

However, deal volume during the six-month period was down by 14% when compared with the first half of 2022, while deal value went up slightly by 0.4%.

“Dealmaking got off to a slow start in 2023 with rising interest rates, persistent inflation and economic uncertainty weighing heavily on M&A activity,” said Watson.

Major deals in GCC

Last March, Apollo Global Management and ADIA confirmed plans to acquire UAE-headquartered Univar Solutions for $8.2 billion. Also in the same month, Blackstone and ADIA signed a deal to acquire Cvent Holding in the UAE for $4.7 billion.

Another major deal followed in April 2023, when the Saudi Arabia-based gaming platform Savvy Games Group, owned by the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), signed a deal to acquire US mobile games developer Scopely for $4.9 billion.

(Writing by Cleofe Maceda; editing by Seban Scaria)