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Mergers and acquisitions (M&A) activity in the Middle East and North Africa (MENA) shrank to its lowest level in more than five years in the first quarter of 2023 as rising interest rates and high inflation soured companies’ appetite for dealmaking.

The value of announced M&A transactions slumped to $31.9 billion during the first six months of 2023, according to data compiler Refinitiv. This is a 34% decrease as compared to a year ago.

However, the number of deals announced in the region for the first six months of 2023 reached the third-highest first-half score since the debut of Refinitiv’s records in 1980. 

Deals involving a MENA target totaled $15.1 million during the first six months of 2023, down 43% from last year and a six-year low. Inbound deals involving a non-MENA acquirer declined 13% to $7.6 billion, while domestic deals decreased 58% in value to $7.6 billion.

Outbound M&A for the MENA region also reached $16 billion, a first-half sum that has only been exceeded once in the last 15 years. Saudi Arabia totaled an outbound investment of $10.9 billion in H1. 

Savvy Games Group will also acquire the US-based Scopely Inc for $4.9 billion, potentially the largest deal. Saudi’s oil giant, Aramco, has set out to acquire a stake in China’s Rongsheng Petrochemical Co. Ltd for $3.6 billion.

Most active was the financial sector, as deals in the industrial companies accounted for 57% of MENA target M&A during the first half of 2023. Deals amounted to a total of $8.6 billion.

Topping all MENA involvement was JP Morgan during the first half of 2023, with eight deals and an amassed market share of 28.9% for a total value of $9.22 billion.