Energy Transition and Diversification Key Catalysts for Middle East Deal Making in 2024

PricewaterhouseCoopers (PwC) anticipates a favourable dealmaking landscape in the Middle East for 2024, driven by decarbonisation efforts and economic diversification.

According to a recent report by PwC, the region's non-oil sector growth, increased private sector engagement and vibrant capital markets are stimulating merger and acquisition (M&A) activity.

The report highlights the enduring influence of factors such as technological disruption and climate change, which are propelling investments regionally or abroad, particularly in critical sectors like energy transition and digital transformation.

Emphasising the necessity for dealmakers to adapt, the 2024 TransAct report underscores the importance of reinventing business models, talent acquisition, and maintaining agility amidst market fluctuations, with a focus on mid-market deals to drive value creation.

"While the global economy has witnessed a slower growth rate, the Middle East has exhibited resilience, bolstered by robust economic fundamentals and supportive government policies," the report notes. This resilience has fostered stability and investor confidence, resulting in a relatively active deal market compared to regions grappling with higher interest rates and recessionary concerns.

Despite decreases compared to 2022, the report anticipates continued activity and growth across various sectors in 2024, driven by governments' strategic agendas to advance diversification efforts and strengthen their economies.

Imad Matar, transaction services leader at PwC Middle East, highlights Saudi Arabia's resilient dealmaking environment, particularly in non-oil private sectors such as infrastructure, industrial manufacturing, and clean technology industries.

"In 2023, Saudi Arabia witnessed less pronounced declines in deal volume. IPO activity also remained robust, and we anticipate a strong pipeline for 2024," Matar stated.

He further predicts sustained momentum as the government moves forward with privatisation initiatives, encourages private sector listings to attract investments, enact reforms and reduce reliance on fossil fuels.

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