PWC – Transact Middle East Mid-year Update M&A Trends, 2023

Despite challenges such as a global economic slowdown, low oil prices, and high inflation, the Middle East remains an attractive region for mergers and acquisitions. The GCC's strong leadership and long-term economic visions, including the goal of achieving net zero domestic emissions, contribute to the positive outlook. While growth in the GCC may be moderate due to the slowdown in the oil sector, the non-oil sector is expected to remain resilient, allowing for reinvestment in national visions. In a PwC survey, Middle East CEOs expressed confidence about revenue growth prospects in the next 12 months and the next three years. However, caution is still present amid global macroeconomic uncertainty. Despite the uncertain environment, there has been reasonable M&A activity in the Middle East, although deal volumes have decreased compared to the previous year. The cautious optimism has led to more selective decision-making, with strategic buyers assessing valuations and potential returns closely. Sovereign Wealth Funds and cash-rich corporations are leading deal activity, taking advantage of attractive valuations in a time of economic uncertainty. Strategic buyers are using acquisitions to accelerate market share growth, extract synergies, and access capabilities or talent. Corporates accounted for the majority of deal volume in the region, particularly in sectors like financial services, technology, industrial manufacturing, energy, and healthcare. Overall, while completed deal volumes may have decreased, M&A activity remains high in the region.