Global M&A Market Shows Rebound in 2024
The 2024 Mergers and Acquisitions (M&A) market has been quite the ride, wrapping up the year with hopes for some smooth sailing between buyers and sellers. According to a report from Bain & Company, dealmakers have been navigating higher interest rates and tighter regulations with caution and adaptability.
Overall, the global M&A deal value is expected to hit $3.50 trillion by the end of 2024, a 15% increase from the previous year, aligning with levels seen in the mid-2010s. Deal volume worldwide is up by seven percent year over year, reversing a two-year trend of decline.
One significant contributor to this growth story is the Middle East, where strategic inbound and domestic M&A activity has surged by 88% to reach $36 billion within the first ten months of 2024. Sovereign wealth funds and government-related entities in Saudi Arabia and the UAE have been driving this trend, in line with global patterns.
Grégory Garnier, Head of Bain’s Private Equity and Sovereign Wealth Fund divisions in the Middle East, highlighted the region’s transformation into a global investment hub. He emphasized the Middle East’s role in high-value deals in energy, technology, and advanced manufacturing as a reflection of its focus on innovation and sustainability, positioning it as a key player in the global economy.
While global private equity and venture capital deals saw increases of 29% and 30% respectively year over year, the Middle East experienced exceptional growth in sector-specific areas like Energy & Natural Resources, Technology, and Advanced Manufacturing Services, showing impressive YoY increases.
Challenges like extended deal close timelines and regulatory concerns have influenced dealmakers in both global and Middle Eastern markets. In the Middle East, the region’s favorable regulatory environment has attracted global investors, leading to significant growth in investments in European targets compared to the previous year.
Larger deals globally and regionally have been driven by a focus on synergies, with scale deals accounting for a majority of total deal value. In response to higher interest rates, strategic acquirers globally have become more selective in their transactions, focusing on value creation. Middle Eastern dealmakers have adapted by leveraging revenue and cost synergies in high-value deals, attracting global capital with their strategic focus and disciplined approach.
In 2024, the adoption of generative AI technology has brought significant efficiencies to M&A practitioners globally, with one in five practitioners utilizing AI for sourcing, screening, and due diligence. This trend underscores the industry’s embrace of technological advancements to improve deal-making processes.
