Egypt’s mergers and acquisitions (M&A) activity have surged by 32 per cent during the second half of 2023, compared to the first half.
According to the latest report by global law firm Baker McKenzie based on the LSEG data for globally announced M&A transactions, Egypt’s M&A in the second half of 2023 experienced the increase in deal volume to 79 deals compared to 60 deals. The total value surged by a whopping 383 per cent to $2.8 billion compared to $597 million.
However, for the full year 2023, both total volume and deal value fell by 53 per cent of 139 deals and 62 per cent of 3.48 billion, respectively.
“This trend was mirrored globally and in the Middle East, with deal values and volumes declining towards the end of the year,” Baker McKenzie report explained.
Globally, M&A activity in 2023 plummeted by 6 per cent in terms of deal volume and by 16.4 per cent in terms of deal value. “The global overall M&A deal volume decline is attributed to the 6 per cent fall in domestic deal volume and a 7 per cent decline in cross-border deal volume.”
For the Middle East region, dealmaking during 2023 also declined by 4.7 per cent in terms of deal volume and by 2.2 per cent in terms of deal value. “The decline in Middle East’s overall M&A deal volume is attributed to the stagnant performance of domestic deal volume and a 7 per cent decline in cross-border deal volume.”
“In the face of the global downturn in M&A activity, the Middle East’s performance reflects a nuanced landscape, with a slight reduction in deal volume offset by a resilient average deal value.” Mohamed Ghannam, managing partner at Helmy, Hamza & Partners, Baker McKenzie Cairo said. “It is a testament to the adaptability of businesses and the evolving nature of M&A dynamics in this region.”
“Further, despite the decline in Egypt’s deal volumes over the full year, the significant growth in total value in the second half of 2023 suggests strategic growth and impactful deals taking place.” Ghannam added.
December the most active month
Throughout most months of 2023, Egypt’s overall deal activity remained subdued. However, December emerged as the strongest month, having witnessed 20 deals. Value-wise, December also outperformed all other months in the year, reaching $1.6 billion – an amount surpassing the monthly values recorded in 2022.
Domestic deal volume experienced a significant fall of nearly half (51 per cent), totaling 52 deals for the full year compared to the previous year’s 106 deals. Conversely, the full-year value increased by 48 per cent, reaching $1.8 billion, compared to $1.2 billion in 2022.
In contrast, cross-border transactions witnessed a decline in both deal volumes and values from 2022. Transaction volume inched down from 189 to 87, and values fell by 80 per cent to $1.6 billion, down from $7.8 billion in 2022.
“While the M&A landscape in Egypt faced notable challenges throughout 2023, the surge in total value in the second half of the year signals resilience and opportunities within the market.” Hani Nassef, M&A Partner at Helmy, Hamza & Partners, Baker McKenzie Cairo, said.
