Saudi's Aramco leads the way as Q3 dealmaking rebounds in Middle East, Africa

M&A activity across the Middle East and Africa rebounded in the third quarter to the best levels in nearly three years, with oil giant Saudi Arabian Oil Co. recording the largest transaction.

Seven of the 10 largest deals during the period targeted companies in the Gulf Cooperation Council (GCC) nations, with Aramco's $10.85 billion deal to buy an additional 22.5% stake in Rabigh Refining & Petrochemical Co. topping the list, S&P Global Market Intelligence data shows. The deal, which includes a net debt assumption worth $10.15 billion, makes Aramco a majority shareholder in the Saudi Arabia-based petrochemical company.

The transaction was the major contributor to the 145% increase in aggregate transaction value to $23.01 billion during the third quarter from $9.37 billion in the preceding three months. This was also the highest quarterly tally since the fourth quarter of 2021, when the total value of M&A deals hit $25.07 billion.

The quarter marked a strong rebound from a lull spanning 2023 and the first half of 2024. Sovereign wealth funds moving to optimize their portfolios and a rapid development of capital markets would be crucial to help lift the Middle East out of its "dealmaking slump," said Samuele Bellani, managing director and partner in Dubai at Boston Consulting Group (BCG), in an Oct. 16 report.

Saudi Arabian Mining Company (Ma'aden) was responsible for two other large transactions in the Gulf region in September — the 20.62% interest it bought in Aluminium Bahrain BSC for $1.06 billion, and the 25% stake it acquired in Al Ba'itha Project and Refinery from Alcoa Corp. for $1.05 billion.

Meanwhile, three major deals in the quarter targeted companies in the United Arab Emirates, including Shelf Drilling Ltd.'s purchase of Shelf Drilling (North Sea) Ltd., and Dubai-based Mashreqbank PSC's sale of a 65% interest in its payment system unit NeoPay to US-based Arcapita Group Holdings Ltd and fintech firm Dgpays SARL.

Israel had two of the 10 largest deals, led by mobile games developer Playtika Holding Corp.'s takeover of local mobile gaming firm SUPERPLAY Ltd. for a total consideration of $1.95 billion .

In Africa, the total volume of M&A deals remained "significantly below historical levels," but it has begun to stabilize with the return of private capital and a growing interest from foreign players and financial investors, Seddik El Fihri, managing director and partner in Casablanca at BCG, wrote in the same Oct. 16 report.

The dealmaking landscape in the continent will likely remain volatile driven by sporadic major deals and concentration of activity in the more advanced economies, El Fihri said. Particularly, he expects M&A to accelerate in South Africa on the back of a positive business sentiment and an improving economic outlook.

– View the deal profile page for the Rabigh Refining & Petrochemical transaction.  – Access customized M&A data using the Screener tool. – Sign up for the Middle East and Africa Monitor, a weekly round-up of banking news in the region.