CAIRO – 1 April 2024: Egypt has witnessed a 60 percent decline in mergers and acquisitions (M&A) activity. This decline has had a profound impact on the business landscape across the Middle East region, according to a recent report by PricewaterhouseCoopers (PwC).
Several factors contributed to the decline, including the devaluation of the Egyptian pound against the US dollar, interest rate hikes, and broader economic challenges.
Despite these obstacles, the devaluation of the Egyptian pound has presented opportunities for investors in specific sectors such as energy, health, financial services, and tourism.
PwC's report highlighted the Ras El Hekma deal between Egypt and the Abu Dhabi Developmental Holding Company (ADQ), which aims to develop the area into a global tourist destination with substantial investments.
In 2023, a significant transaction took place in Egypt, where an Emirati company called Global Investments acquired a 30 percent share in Eastern Company, the country's leading tobacco manufacturer.
This deal, valued at $625 million, ranked as the third-largest deal in terms of volume across the Middle East.
This deal is part of Egypt's broader initial public offering (IPO) program.
Egypt is looking to attract $6.5 billion from its IPO program in 2024, Minister of Finance, Mohamed Maait Said in February.
The government launched the IPO program back in March of last year, offering state-owned stakes in up to 40 companies and banks across 18 sectors.
Furthermore, the Middle East as a whole experienced a decrease of 30 percent in the total number of deals in 2023, with approximately 447 transactions reported, indicating a decline compared to the previous year.
The region witnessed a concentration of small-sized deals, often amounting to $100 million or less. Despite fluctuations in interest rates, these deals demonstrated resilience and accounted for approximately 92 percent of the total transactions by the end of 2023.
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