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KSA’s ‘unprecedented growth’ set to strengthen position as M&A leader in 2022

Saudi Arabia has become one of the most attractive markets for international companies pursuing new mergers and acquisitions, and it is set to maintain its position in 2022.

The kingdom’s growth stood at 6.8 percent for the third quarter. This is owed to rising world demand for crude oil, ambitious Saudi Vision 2030 targets, cutting the Kingdom’s dependence on the sale of hydrocarbons through the development of non-oil sectors, as well as advances in fighting the COVID pandemic.

This has helped set the kingdom for continued growth in M&A in the coming year.

Fikry Younis, the Riyadh-based partner of Lumina Capital Advisers, said: Saudi Arabia is witnessing M&A activity across all sectors, with the focus on social infrastructure — including healthcare, education and logistics — tourism, entertainment and sports, Environmental, Social, and Governance investing, and green energy.”

There is also significant action in technology that acts as an enabler to other sectors, such as health tech, edu-tech, and fintech.

Tourism is expected to account for more than 10 percent of Saudi Arabia’s gross domestic product. The Kingdom intends to invest more than $1tn in the tourism sector over the next 10 years.

Without a doubt Vision 2030 is the main driver to the flurry of M&A activity in Saudi Arabia, says Younes.
“One of the core pillars of Vision 2030 is the localization of know-how. We have therefore seen many sub-industries across the wider manufacturing spectrum benefit from governmental initiatives — chemicals & materials, pharmaceuticals, etc.

Covid did have an effect of course, mainly during H1 2020, but as is the case globally, most sectors have recovered well in 2021.

M&A activity in Saudi Arabia is both inbound and cross-border, agree on specialists.
One example is Saudi Arabian companies’ deals with their Omani counterparts worth $10 billion.

“International investors are investing inbound to Saudi to benefit from the unprecedented growth, especially with the challenges that many are encountering in their home countries: COVID, supply chain challenges, inflation, etc.

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