According to the latest report by global law firm Baker McKenzie, based on LSEG data for globally announced M&A transactions, Egypt’s M&A in the second half of 2023 (H2 2023) experienced a 32% increase in deal volume to 79 deals compared to 60 deals in the first half of 2023 (H1 2023), while the total value surged by 383% to USD 2.8 billion compared to USD 597 million. But for the full year 2023, both total volume and deal value declined by 53% (139 deals) and 62% (USD 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.
Globally, M&A activity in FY 2023 decreased by 6% in terms of deal volume and by 16.4% in terms of deal value. The global overall M&A deal volume decline is attributed to the 6% drop in domestic deal volume and a 7% decline in cross-border deal volume.
In the Middle East, dealmaking during FY 2023 decreased by 4.7% in terms of deal volume and by 2.2% 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% decline in cross-border deal volume.
Commenting on Egypt’s M&A deals activity, Mohamed Ghannam, Managing Partner at Helmy, Hamza & Partners, Baker McKenzie Cairo said: “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. 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.”
Throughout most months of FY 2023, overall deal activity in Egypt remained subdued. However, December emerged as the strongest month, witnessing 20 deals. Value-wise, December outperformed all other months in the year, reaching USD 1.6 billion – an amount surpassing the monthly values recorded in 2022.
Domestic deal volume experienced a significant decline of nearly half (51%), totaling 52 deals for the full year compared to the previous year’s 106 deals. Conversely, the full-year value increased by 48%, reaching USD 1.8 billion, compared to USD 1.2 billion in 2022.
In contrast, cross-border transactions saw a decline in both deal volumes and values from FY 2022. Transaction volume fell from 189 to 87, and values dropped by 80% to USD 1.6 billion, down from USD 7.8 billion in FY 2022.
Hani Nassef, M&A Partner at Helmy, Hamza & Partners, Baker McKenzie Cairo, further stated: “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.”
“Additionally, globally and in the Middle East, the fluctuations observed emphasize the dynamic nature of the M&A environment, with varying impacts on both domestic and cross-border transactions.”
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- Source: https://mystartupworld.com/egypts-ma-activity-declines-in-2023/
