While governments across the Middle East are promoting green technologies and good practices to transition to sustainable economies, a new study found that the region’s mergers and acquisitions activities have returned to pre-pandemic levels.

In the first three quarters of 2022, the Middle East saw 283 M&A transactions, up by 16% from the same period in the previous year, with a total value of $23.8 billion, according to a report by Boston Consulting Group.

BCG report: The 2022 M&A revealed a rising trend in “green” agreements over the previous ten years. The largest acceleration occurred in 2021 when Middle East deal volumes nearly doubled to 10.3% after two lukewarm years for green transactions and broader M&A activity.

The energy and utility sector has experienced the greatest growth in green M&A over the previous ten years, with a 98% increase in agreements from 2020 to 2021, accounting for 10% of M&A deals in the Middle East in 2021.

The second-most active region was Asia-Pacific, which in 2021 had a green deal share of almost 8%.

The survey also predicts that environmental concerns will drive increasing mergers as “green” M&A agreements grow. It shows that more dealmakers are becoming aware of the potential for these agreements to create value.

“Green deals are very hot in the region. Soaring sustainability transactions in the Middle East are a clear outcome of established national transformation programs seeking out diverse economic outputs for countries on their path to net zero,” said Ihab Khalil, managing director and senior partner at BCG.   

“As the region continues grounding itself as a hub where collaboration and diversification can bear fruit, so will green mergers and acquisitions,” Khalil added.