Saudi Arabia Leads Middle East M&A Activity in Chemicals Sector with $500 Million Deals

In the first quarter (Q1) of 2024, Saudi Arabia has emerged as the leader in mergers and acquisitions (M&A) in the Middle East’s chemicals sector, according to recent data from financial markets platform Dealogic. The Kingdom recorded $500 million worth of deals in the chemicals sector, highlighting its significant role in the region’s M&A landscape.

Dealogic’s figures revealed that Saudi Arabia’s total M&A deal volume for Q1 2024 reached $955 million, with the chemicals sector accounting for a substantial 52.4 percent of this total. Notably, Saudi Arabia was the only country in the Middle East to exhibit activity in the chemicals sector during this period.

A report from management consulting firm Kearney earlier this month indicated that chemical industry executives expect increased M&A activity, particularly driven by strategic investors such as national oil companies. “Recent deals by major players like Aramco and ADNOC underscore the region’s commitment to leveraging M&A as a key growth lever, setting the stage for a dynamic and transformative period ahead,” stated Jose Alberich, partner for the Middle East and Africa at Kearney.

Beyond the chemicals sector, Dealogic’s data highlighted other targeted sectors in Saudi Arabia. The professional services sector was the second most targeted, with deals worth $160 million, accounting for 16.8 percent of the Kingdom’s total M&A volume. The technology sector followed closely with $138 million in deal value, capturing a 14.5 percent share. Additionally, the retail and insurance sectors represented 7 percent and 4.1 percent of the total, respectively.

The broader Middle East M&A landscape saw a targeted deal volume of $6.21 billion in the first three months of the year. The technology sector led with 42 deals worth $1.56 billion, underscoring its growing prominence in the region.

However, on a global scale, M&A activity experienced a significant decline during the same period. The number of transactions fell by 31 percent to 7,162, marking one of the quietest quarters for dealmakers in nearly two decades. This global slowdown was largely attributed to high capital costs, with Switzerland being the only major economy to cut interest rates in 2024.