Saudi Arabia’s M&A Activity Surges 55% in 2024, Driven by Foreign Investment

Mergers and acquisitions (M&A) in Saudi Arabia saw a significant 55% increase in 2024, with deal values reaching $9.6 billion. The surge was fueled by foreign investors and activity in key sectors aligned with the Kingdom’s Vision 2030 strategy, according to a report by Marsh.

A total of 59 M&A transactions were completed, with 25% of deals in the industrial sector, 20% in technology, and 14% in consumer and retail. This growth also contributed to a 78% rise in demand for transactional risk insurance across the Gulf Cooperation Council (GCC).

Saudi Arabia Bucks Global M&A Trend

While global M&A activity saw a decline, Saudi Arabia’s market remained strong. A December 2024 report from GlobalData revealed an 8.7% annual drop in global transactions, including private equity and venture financing. In contrast, Saudi Arabia attracted significant international interest, with foreign investors accounting for 32% of the total $9.6 billion in M&A activity.

“The most active foreign buyers were from the U.S., UAE, and UK,” said Luke Sutton, head of transactional risk for the Middle East and Africa at Marsh. “Inbound investment was concentrated in tech (25%), business services (15%), industrials (15%), energy and natural resources (10%), and transportation (10%).”

Across the broader GCC region, inbound investment made up 25% of all insured M&A transactions, reflecting the growing role of foreign investors in regional deal-making.

Regulatory Reforms and Government Support Drive Growth

Saudi Arabia’s commitment to economic diversification under Vision 2030 has been a key driver of M&A activity. Government-led reforms, including the introduction of 100% foreign ownership in select sectors, streamlined licensing procedures, and a unified regulatory framework for local and foreign businesses, have attracted international investors.

“The Kingdom has significant M&A potential, supported by government-backed capital expenditure,” Sutton noted. “Recent regulatory changes have made it easier for foreign buyers to enter the market.”

One notable development has been the Saudi Insurance Authority’s approval of Warranty and Indemnity (W&I) insurance for domestic buyers. This move is expected to further accelerate deal activity by reducing post-sale risks and expediting transactions.

Insurance Market Expands to Support M&A Growth

The demand for M&A insurance has grown alongside deal activity. Marsh reported that it facilitated over $550 million in insurance capacity for transactions in Saudi Arabia and the UAE, covering deals worth $2.25 billion.

Sovereign wealth funds (SWFs) played a key role in this expansion, making 2024 the highest year for global deal-making by such entities in more than a decade. Saudi Arabia’s Public Investment Fund (PIF) has transitioned from a passive investor to an active player in cross-border transactions, frequently acquiring controlling stakes in major deals.

Private equity funds have also increased their reliance on W&I insurance, which provides protection against post-deal risks and ensures clean exits for sellers. According to Nirav Modi, leader of Marsh’s private equity and M&A services, the number of insured deals has risen sharply in the GCC over the past two years.

“Previously, limited insurer appetite and high costs kept many deals uninsured. However, the market has evolved significantly, with more insurers entering the space and premiums dropping over 60% since 2021,” Modi said.

Outlook for 2025: Strong Growth in Key Sectors

Despite a 13% decline in overall M&A deal volume across the Middle East and Africa in 2024, the total deal value in the region rose by 42% to $33 billion, reflecting a shift toward larger, more strategic transactions.

Saudi Arabia played a central role in this trend, particularly in infrastructure and public-private partnerships. With a target of increasing annual foreign direct investment (FDI) from $26 billion in 2023 to $100 billion by 2030, the Kingdom is expected to remain a top destination for global capital.

Sectors such as clean energy, logistics, digital infrastructure, and advanced manufacturing are likely to drive future M&A activity, supported by regulatory enhancements and insurance-backed risk management strategies.

As Saudi Arabia continues its economic transformation, M&A insurance is set to play a crucial role in facilitating secure, high-value transactions and strengthening investor confidence in the region.