Saudi’s ‘unprecedented growth’ set to catalyse M&A activity in 2022

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

Saudi posted growth of 6.8% for the third quarter of last year due to rising world demand for crude oil and the impact of the ambitious Saudi Vision 2030 targets, which are dedicated to the development of non-oil sectors, as well as advances in fighting the COVID pandemic.

Saudi is seeing M&A activity across all sectors, with a focus in social infrastructure — including healthcare, education and logistics — tourism, entertainment and sports, ESG investing and green energy. There is also significant action in technology, which acts as an enabler to other sectors, such as healthtech, edutech and fintech.

In 2021, it is estimated there were USD44 billion of announced deals in the Kingdom, compared to USD75 billion across the whole Middle East and North Africa region including Saudi Arabia.

The largest announced transactions were the acquisition of 49% stake in Aramco’s Oil Pipeline Co by a consortium led by EIG Global Energy, the acquisition of an Aramco portfolio of gas assets by US-based Air Products and ACWA Power, and the acquisition of a 50% stake in Saudi National Petrochemical Company by the Saudi Industrial Investment Group.

The Saudi British Bank, the HSBC subsidiary, also completed its merger with Alawwal Bank, while National Commercial Bank and Samba Financial Group merged under the name of Saudi National Bank (SNB), which will account for a 25% market share and boast a combined equity of USD31.96 billion.

“Saudi Arabia possesses a comparative advantage in the energy sector and really wants to monetise its energy assets. Technology firms are thriving globally, and Saudi Arabia is pushing to become a global technology hub,” said Robert Mogielnicki, Senior Resident Scholar at the Arab Gulf States Institute (AGSIW) in the US.