OPINION PIECE
Winning Combinations George Hojeige CEO of Virtuzone describes the flourishing M&A scene in the region, while highlighting that such activity is not just the preserve of big corporations, he shows that it can also be an opportunity for start-ups to add key strengths to their business
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closer look at MENA’s M&A activities: Deconstructing successful M&A deals and exploring opportunities for start-ups
The recent year has been marked by a resurgence of economic activities in the region, signalling a positive trend towards widescale post-pandemic recovery. One such activity that has gained velocity over the last year is Mergers and Acquisitions (M&A) in the Middle East and North Africa markets, which recorded a total of 661 deals amounting to USD 99 billion in 2021. This represents a 66% increase from the 397 M&A deals made in 2020, valued at USD 85.2 billion, according to a report released by international accounting firm Ernst & Young. Concluding 303 M&A deals in 2021, the United Arab of Emirates ranked first when it came to volume, whereas the Kingdom of Saudi Arabia brought home the biggest M&A capital, with a value of USD 47.4 billion. The report also credited governmentrelated entities for executing the majority
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George Hojeige, CEO, Virtuzone
Banking and Finance news in the MEA market
of the deals, which accounted for USD 62.6 billion (63%) of the total annual deal value. On the other hand, private equity participation also increased, with 165 deals in 2021 compared with 73 in 2020.
MENA’s outstanding M&A deals in 2021 Saudi Arabian Oil Company (Aramco) sealed one of the biggest M&A deals last year with EIG Global Energy Partners, one of the world’s established capital providers to the energy sector, and Mubadala Investment Company, a state-owned sovereign wealth fund in Abu Dhabi. T h e U S D 1 2 .4 b i l l i o n e n e rg y infrastructure deal gave the consortium of international investors a 49% equity stake in Aramco Oil Pipelines Company, a newly formed subsidiary of Aramco. Aldar Properties, one of the UAE’s biggest real estate developers, together with Abu Dhabi Developmental Holding Company (ADQ), a key holding company and strategic partner of the Abu Dhabi Government, made headlines in 2021 when they invested USD 388 million to acquire a majority stake (85.5%) in Sixth of October for Development and Investment Company (SODIC), one of Egypt’s leading real estate companies specialising in high-quality residential, commercial and retail property. Another prominent M&A deal finalised in 2021 was First Abu Dhabi Bank’s 100% acquisition of the Egyptian subsidiary of Bank Audi, a Lebanon-based bank and financial services company. First Abu Dhabi Bank, the largest bank in the UAE, reportedly has assets valued at USD 267.6 billion as of 2021. After completing its first international acquisition, FAB Egypt is expected to be one of Egypt’s l a rg e s t fo re i g n b a n ks b a s e d o n total assets. The common denominator in these M&A activities is that they place investors in a stronger industry position, give them access to new markets beyond their borders, and present opportunities to gain a larger global market share.
