Sovereign wealth funds (SWF) dominated M&A activity in 2023, according to a newly published report.
The report from Bain & Company found that government-backed funds accounted for 86% of M&A deals in the last year.
In total, SWFs invested US$87.1 billion into various M&A deals in the region.
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The estimated value of M&A activity in 2023 was $95 billion, a slight decrease from the $98 billion invested in the previous year and in line with a global decline in M&A value due to high interest rates, macroeconomic tensions and more government scrutiny into potential takeovers, according to Bain.
Consequently, government-backed funds have a “pivotal” role to play in the region’s M&A market , stated the report.
“The Middle East is undergoing a significant shift towards accelerating the energy transition, with a growing emphasis on clean energy investments and ambitious net-zero tar gets,” said Elif Koc, a partner at Bain & Company Middle East.
“Through strategic investments, sovereign wealth funds are leading the charge in reshaping the economic future of the Middle East, diversifying beyond oil and laying the groundwork for sustainable growth and prosperity.”