Saudi Arabia to lead M&A activity in Middle East: KPMG

Saudi Arabia is expected to lead merger and acquisition (M&A) activity in the Middle East going forward, as the government carries out reforms to diversify the Kingdom’s economy, audit firm KPMG Al Fozan & Partners said in a statement on Monday.

The M&A activity will primarily take place in the materials, industrial and construction sectors, insurance, transportation, real estate development, retail and food services, and automotive sector.

The aM&A activities will contribute to strengthening the financial position of companies, reducing costs, transferring knowledge, reducing operational and financial risks and increasing competitiveness.

The government’s focuses on reforms in a number of areas including laws and regulations would contribute to the acceleration of M&A activities this year, the report said, adding that the recent inclusion of the Saudi Stock Exchange in MSCI’s Emerging Markets Index has resulted in a significant positive impact.

"The Saudi market will witness a leap in M&A activities during the current year as investors and transaction makers gain confidence in the positive fundamentals of the Saudi economy," said Abdullah Al-Fozan, chairman, KPMG MESA and KPMG Saudi Arabia.

In May, Al-Fozan told Argaam that the company is expecting to close between three and six M&A deals in the Kingdom this year.

Meanwhile, global M&A deal-making is expected to see another robust year in 2018, with predicted appetite and capacity for deals both expected to increase by 5 percent and 17 percent, respectively, according to KPMG International’s 2018 M&A Predictor report.