.jpg?20250205')
Morgan Stanley forecasts a ‘structural upswing’ in Middle East and North Africa (Mena) mergers and acquisitions (M&A) activity in 2025, driven by policy changes and regulatory reforms, after a challenging 2024, Zawya has reported.
The investment bank, which topped the Mena M&A financial advisor league table in 2024, according to LSEG data, advised on nine deals worth a combined $31.8 billion.
Rothschild & Co. and Goldman Sachs followed with $22.7bn and $19.54bn in deals, respectively.
LSEG data showed 1,111 Mena-related M&A transactions in 2024, totaling $75bn, a 4pc drop in value from 2023, though deal numbers rose 1pc.
“If you look at three of the larger transactions that we were involved in, they each had different characteristics,” said Patrick Delivanis, regional co-head of Mena at Morgan Stanley.
He cited larger Mena corporates investing internationally, sovereign wealth funds’ outward investment coupled with inward manufacturing development, and inward investment by a global asset manager.
Morgan Stanley advised on the year’s largest deal, state oil giant Adnoc’s $17.6bn bid for German chemicals firm Covestro, according to LSEG’s ‘Investment Banking Activity in MENA 2024’ report.
The bank also advised Alat, a Saudi Public Investment Fund unit, on its $2bn investment in Lenovo, and Brookfield Asset Management on its $2.8bn acquisition of Dubai-based payments provider Network International.
Morgan Stanley highlighted the region’s evolving investment landscape as a key driver of M&A activity.
“It is because of these policy shifts and regulatory reforms that investors are attracted to the Mena markets,” said Abdulaziz Alajaji, regional co-head of Mena at Morgan Stanley. “International investors are seeing greater opportunities, and this makes it easier for them to deploy capital because they are able to exit and recycle their capital on clearer terms.”
He added that regulations facilitating investment exits, via trade sales or IPOs, are crucial, as easier and more consistent IPO processes align with international practices.
While transactions have concentrated in Saudi Arabia and the UAE, Mr Delivanis noted a “healthy broader market” across the Gulf Cooperation Council (GCC), with rising activity in Qatar, Kuwait, Bahrain, and Oman.
LSEG data showed inbound deals with non-Mena acquirers surged 49pc in value to a three-year high of $14.2bn. Mena outbound M&A totaled $40.2bn, down 3pc.
Mr Alajaji said Mena, traditionally a capital exporter, is now actively promoting inbound investment, making it unique from a global capital flow perspective. “Social reforms also enhance investor confidence,” he added.
Mr Delivanis highlighted “more active” sectors including healthcare, technology, space, artificial intelligence, trade and logistics, energy, and chemicals.
LSEG reported industrials as the most active sector (27pc of MENA target M&A in 2024), followed by materials and financials.
Despite global uncertainties, fluctuating interest rates, and the Trump presidency in the US, Morgan Stanley remains optimistic.
Mr Delivanis noted continued near-term Mena growth prospects, citing global energy transition opportunities and global client investment in the region.
&uuid=(email))