Egypt’s M&A activity slowdown in H2 2022

Updated 2/19/2023 8:38:00 AM

Arab Finance: The merger and acquisition (M&A) market in Egypt has seen a slowdown in the second half (H2) of 2022, according to a recent report by Baker McKenzie.

Accordingly, the overall outcome of 2022 has been affected, with deal volumes and values tumbling by 16% and 37%, respectively, as compared to 2021.

Total deal volume and value dropped to 115 deals, with $4.2 billion in value, in H2 2022 from 126 deals, with USD 4.3 billion in value, in H2 2021.

In 2022, total deal volume and value fell marginally to 242 deals, with $8.2 billion in value, from 243 deals, with $9 billion in value in 2021.

“Despite increased global and domestic market uncertainties generally and significant devaluation of the Egyptian pound, we continue to see reasonably strong interest and opportunities in the Egyptian market preserving its momentum in dealmaking and further attracting local and international investors from across various sectors, particularly in defensive industries such as TMT, energy, healthcare and education, as well as financial services, to sign and close deals," Mohamed Ghannam, Managing Partner at Helmy, Hamza & Partners, Baker McKenzie Cairo, commented.

Domestic transactions slipped in volume by 9% with 111 deals for 2022; however, they dropped sharply in value by about 46% with $1.4 billion.

Furthermore, Egypt's cross-border deal volume witnessed a downward of 12% to 59 deals in H2 2022 from 67 deals in H2 2021.

As for 2022, cross-border deals grew in volume by 8% to 131 deals and rose in value by 7% with $7 billion worth of deals.

“We have seen a number of inbound investments from gulf states, specifically from the UAE and Saudi Arabia, with appetite to continue to invest in Egypt with investments amounting at $2.3 billion from the UAE and $1.7 billion from Saudi in 2022," Hani Nassef, M&A Partner at Helmy, Hamza & Partners, Baker McKenzie Cairo, said.