Despite the global slowdown, Mergers and Acquisitions (M&A) activity will pick up in Saudi Arabia in 2023, boosted by a solid economy and ambitious government-backed mandates.

According to the PwC Middle East report, Vision 2030, which aims to diversify the country’s economy, industry policies, and numerous tourism activities, are playing a significant role in attracting global investors to the kingdom.

“Saudi Arabia is expecting a further pick up in M&A activity during 2023, despite a strong pipeline of IPOs, as the gap in valuation multiples between these two exit routes narrows for investors looking to sell assets,” said Imad Matar, deals partner at PwC Middle East in Saudi Arabia. 

“At the same time, the Public Investment Fund will continue to spearhead outbound cross-border transactions and fuel domestic deals. Middle East CEOs are actively preparing for a more dynamic period ahead, marked by transformation to strengthen their longer-term resilience,” Matar added.

The report also talked about the initial public offerings in Saudi Arabia, which witnessed 17 primary listings in 2022, including the $1.3 billion IPO of Saudi Aramco Base Oil Co. 

According to the report, while the Middle East sees an increase in M&A transactions, most of the region’s M&A activity, which totaled 563 transactions and 89% of the region’s overall volume, were in Saudi Arabia, the UAE, and Egypt. 

However, earlier this month, the MENA Investment Banking Review stated that deals announced in the region decreased by 26% from 2022. The number of deals declined 22% from last year and marked the lowest first-quarter deal count since 2020.

The value of disclosed M&A deals involving the region reached $8.3 billion in Q1 2023, 65% lower than the value from the first quarter of 2022, according to Refinitiv statistics.