Cross-border M&A activity is on the rise in MENA, according to a report by Baker McKenzie Cross Border Index. The report looks at inbound activity first and finds that KSA and the UAE Account for the lion’s share, with 40 transactions between them. Outbound activity follows a similar pattern: the UAE leading with 58 acquisitions, Qatar nabbing 21 and KSA 16. The article takes note of Saudi’s Public Investment Fund acquiring a 5.6% stake in Uber as one of the high profile moves out of the region. While oil finding its new lower range is putting a damper on government spending, the lawyers suggest that in the long run this will encourage M&A through the need to diversify away from traditional sectors. There is a limit on assets available however, which is creating frothy valuations because of higher outside demand. One of the other pitfalls in MENA is how much more difficult it is to exit an investment than the West.

Looking to the future, the three trends to watch in MENA M&A include new avenues opened by tech; economic diversification in countries including Saudi; and outside private equity firms attracted to the MENA growth story.