March 09, 2022

Market Spotlight: Digitization of M&A Deals in the Middle East & Turkey

By Suzy Bibko, Content Marketing Manager, EMEA

How is increased digitization impacting M&A in the Middle East and Turkey? John Komninakidis, Eren Kursun, Abhishek Sharma, and Siddesh Mayenkar recently met to discuss this issue. And it appears that tech is on the up, in terms of deals and dealmaking, as is general optimism for M&A.

Optimism and pent-up demand for M&A

Last year, MENA M&A activity reached $132.8bn – almost double the $77bn in 2020. And the Turkish M&A market remained strong, with total value estimated at around $14bn in 2021, despite the challenges of conducting cross-border deals there. Going forward, per our latest Deal Drivers report, Turkey and the Middle East, along with Africa, could be set for more, with TMT deals expected to lead the charge. 

What’s driving this activity? At the time of the webinar, there was clearly a sense of optimism (see poll results above), whether due to improved vaccination rates – Saudi Arabia and Turkey have recorded full vaccination rates approaching 60% of the population – increasing oil prices (at end-September, oil broke through the US$80 per barrel threshold for the first time in three years, while gas prices crested record highs in Q3 2021), or just a general feeling that things are starting to get back to normal. Whether that lasts in the current world landscape, time will only tell. 

Moreover, pent-up consumer demand has fuelled economic growth in the region: Europe and Africa’s GDP rebounded by 5.1% in 2021, and the Middle East saw GDP growth of 2.1%. Moreover, both regions scored some mega deals last year (Saudi Arabian Oil Company, SOCAR Turkey Enerji, Hepsiburada to name a few). And with the governments of Saudi Arabia and the UAE expected to be the main driver of M&A and IPO activity in the region this year, M&A could certainly be booming in 2022 in the region.

Increased investment in technology

Technology is increasingly playing a bigger role in M&A in the region. Both in the types of deals and the way they are getting done. Digitization has driven deals during the pandemic. And the digital space is driving deals. 

During the pandemic, dealmakers realized that deals could still be done. And that was due to the right technology being available – technology with tools that allowed them to complete due diligence remotely and tools that increased speed and efficiency. These aspects are still important for deals today (see poll results above), as dealmakers have not yet fully returned to the office (and might never), and time is always of the essence when it comes to M&A deals.

And with increased appetite for foreign investment in the region, being able to easily and securely collaborate with people who sit in different parts of the world is key to getting deals done. The governments and regulators in the region are also seeing the value in customizing and streamlining processes through technology, so it can lead to a better outcome for everyone.

Combine this with the uptick of deals in the digital sector in the region, and technology could be the new buzzword for M&A there. In the Middle East, health tech and digital healthcare are on the rise, and Turkey has become the new gaming hub. So, the region is embracing the TMT sector for deals, and those deals are getting done with the aid of technology.

To hear what the experts had to say on these topics and more, watch the webinar replay.

Deal Drivers: EMEA FY 2021

EMEA M&A experienced record levels in 2021. What sectors drove activity and where can we expect to see more deals in 2022?

Download report

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