The number of mergers and acquisitions in the Middle East and North Africa rose 13 per cent on an annual basis last year to 754 transactions, with the UAE topping M&A activity in the region, according to EY.
The region's "unprecedented" M&A activity came on the back of improved market conditions from higher oil prices, investor-friendly reforms and governments easing Covid-related travel restrictions, the London-based consultancy said on Monday in its EY MENA M&A Insights 2022 report.
The UAE recorded three of the region’s largest M&A deals, led by Canadian fund Caisse de Depot et Placement du Quebec’s acquisition of a 22 per cent stake in three of DP World's Dubai-based assets for $5 billion.
The second-biggest was an outbound deal by Abu Dhabi-based telco e&, which acquired a 9.8 per cent stake in the UK's Vodafone Group for $4.4 billion in May.
Adnoc's acquisition of 24.9 per cent stake in OMV from Mubadala Investment Company for $4.1 billion rounded off the top three deals.
"After a resurgence in 2021, M&A activity in the Middle East reached new heights last year, testifying to the success of companies adjusting their M&A strategies to the needs of the changing market," said Brad Watson, EY Mena strategy and transactions leader.
"Continuing a strong run, domestic deals were a significant driver of deal volume in the region.
"Furthermore, the number of inbound deals in the UAE indicates that non-Mena investors are showing significant interest in the conducive business environment created by its visionary government.”
The UAE, the Arab world’s second-largest economy, and the wider GCC region has seen a flurry of M&A activity amid strong investor demand as economies rebound at a quicker pace from the coronavirus-induced slowdown and liquidity has been shored up by high oil prices.
The UAE dominated the lists of M&A target countries and bidder countries by value last year, followed by Saudi Arabia in both rankings, EY said.
In the kingdom, the Public Investment Fund’s proposed acquisition of a 51 per cent stake in STC's telecom towers company Tawal is in line with the country’s Vision 2030 that seeks to diversify its economy away from oil, the report said.
Meanwhile, Saudi Aramco's acquisition of US motor oil and lubricant maker Valvoline's global products business for $2.7 billion was a "strategic transaction in the oil and gas sector".
Egypt and Oman also climbed into the top five rankings of Mena target and bidder countries, the M&A report showed.
The US had the highest Mena deal number at 35 — of which 19 were in the technology sector.
Domestic deals made up slightly more than half of the total M&A deal volume in Mena at 388 transactions and 34 per cent of the value at $28.4 billion, the report showed.
Outbound deals led in value with $40.1 billion across a total number of 201 transactions, while 165 inbound deals amounted to $14 billion in total disclosed value.
The region recorded 137 deals involving government-related entities (GREs) last year, which was 78 per cent higher than 2021 and the highest number since 2017, according to EY.
GRE-involved deals accounted for 49 per cent of the total disclosed deal value at $40.3 billion.
In terms of sectors, technology made up 25 per cent of the total deal volume in Mena, as the region seeks to become a hub for tech start-ups by further easing the conducting of business, reforming legislation and enabling investment.
"The macro-economic challenges in the US and Europe have triggered a retreat of capital to the Mena region with the GREs and regional strategics leading the pack," said Anil Menon, EY Mena head of M&A and equity capital markets.
"Large cap players are super active and hunting. The unprecedented volume of deal activity in 2022 is a clear reflection of an exceptionally buoyant deal environment, which we expect will continue in 2023."
Meanwhile, global M&A activity is off to a record slow start to the year, its slowest since 2010, according to a separate report by Goldman Sachs on Monday.
Year-to-date activity is down 65 per cent on the same period last year.
The slowdown comes amid continued macroeconomic uncertainty and the "prospect of increasing pressure on earnings" that has left companies "erring on the conservative side" and remaining in "defence mode", it said.
Killing of Qassem Suleimani
How The Debt Panel's advice helped readers in 2019
December 11: 'My husband died, so what happens to the Dh240,000 he owes in the UAE?'
JL, a housewife from India, wrote to us about her husband, who died earlier this month. He left behind an outstanding loan of Dh240,000 and she was hoping to pay it off with an insurance policy he had taken out. She also wanted to recover some of her husband’s end-of-service liabilities to help support her and her son.
“I have no words to thank you for helping me out,” she wrote to The Debt Panel after receiving the panellists' comments. “The advice has given me an idea of the present status of the loan and how to take it up further. I will draft a letter and send it to the email ID on the bank’s website along with the death certificate. I hope and pray to find a way out of this.”
November 26: ‘I owe Dh100,000 because my employer has not paid me for a year’
SL, a financial services employee from India, left the UAE in June after quitting his job because his employer had not paid him since November 2018. He owes Dh103,800 on four debts and was told by the panellists he may be able to use the insolvency law to solve his issue.
SL thanked the panellists for their efforts. "Indeed, I have some clarity on the consequence of the case and the next steps to take regarding my situation," he says. "Hopefully, I will be able to provide a positive testimony soon."
October 15: 'I lost my job and left the UAE owing Dh71,000. Can I return?'
MS, an energy sector employee from South Africa, left the UAE in August after losing his Dh12,000 job. He was struggling to meet the repayments while securing a new position in the UAE and feared he would be detained if he returned. He has now secured a new job and will return to the Emirates this month.
“The insolvency law is indeed a relief to hear,” he says. "I will not apply for insolvency at this stage. I have been able to pay something towards my loan and credit card. As it stands, I only have a one-month deficit, which I will be able to recover by the end of December."
Favourite book: ‘The Art of Learning’ by Josh Waitzkin
Favourite film: Marvel movies
Favourite parkour spot in Dubai: Residence towers in Jumeirah Beach Residence
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Springsteen: Deliver Me from Nowhere
Director: Scott Cooper
Starring: Jeremy Allen White, Odessa Young, Jeremy Strong
Rating: 4/5
THE BIO
Favourite place to go to in the UAE: The desert sand dunes, just after some rain
Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude
Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE
Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally
Favourite subjects in school: Mathematics and science
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors. More from Rashmee Roshan Lall
THE%C2%A0SPECS
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Stree
Producer: Maddock Films, Jio Movies
Director: Amar Kaushik
Cast: Rajkummar Rao, Shraddha Kapoor, Pankaj Tripathi, Aparshakti Khurana, Abhishek Banerjee
Rating: 3.5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Roger Federer's 2018 record
Australian Open Champion
Rotterdam Champion
Indian Wells Runner-up
Miami Second round
Stuttgart Champion
Halle Runner-up
Wimbledon Quarter-finals
Cincinnati Runner-up
US Open Fourth round
Shanghai Semi-finals
Basel Champion
Paris Masters Semi-finals
KILLING OF QASSEM SULEIMANI
Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
Number of employees: 90
Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
Fight card
- Aliu Bamidele Lasisi (Nigeria) beat Artid Vamrungauea (Thailand) POINTS
- Julaidah Abdulfatah (Saudi Arabia) beat Martin Kabrhel (Czech Rep) POINTS
- Kem Ljungquist (Denmark) beat Mourad Omar (Egypt) TKO
- Michael Lawal (UK) beat Tamas Kozma (Hungary) KO
- Zuhayr Al Qahtani (Saudi Arabia) beat Mohammed Mahmoud (UK) POINTS
- Darren Surtees (UK) beat Kane Baker (UK) KO
- Chris Eubank Jr (UK) beat JJ McDonagh (Ireland) TKO
- Callum Smith (UK) beat George Groves (UK) KO
The Vile
Starring: Bdoor Mohammad, Jasem Alkharraz, Iman Tarik, Sarah Taibah
Director: Majid Al Ansari
Rating: 4/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The view from The National
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
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