M&A in Egypt took a slight dip in 2022 amid a sharper downturn in transactions across the Middle East and the world, according to a report by Baker McKenzie (pdf). The total value of Egyptian M&A transactions dipped some 9% to USD 8.2 bn last year, dealcount remained more or less flat at 242 transactions, according to the report, which is based on Refinitiv data.

Egypt remained attractive in the face of global headwinds: “Despite increased global and domestic market uncertainties generally and significant devaluation of the EGP, we continue to see reasonably strong interest and opportunities in the Egyptian market,” said Mohamed Ghannam, managing partner at Helmy, Hamza & Partners, Baker McKenzie Cairo, who singled out defensive sectors including tech and telecoms, energy, healthcare, education, and financial services as among the most resilient.

There were fewer transactions in 2H 2022, but total values remained steady: The second half of the year saw 115 M&As, down from 127 in the first half of 2022 and 126 in 2H 2021. Total transaction value came in at USD 4.2 bn, compared with USD 4 bn in the previous half and USD 4.3 bn in 2H 2021.

We outperformed the region — and everyone else: Middle East dealmaking dipped 46% by value to USD 40.4 bn in 2022 despite a 4% rise in the number of transactions. Globally, the number of M&A transactions fell 16% for the year. Total M&A value globally was down 37% to USD 3.6 tn as the market cooled from 2021, when M&A volumes surged to record levels following the pandemic.

Cross-border transactions accounted for the bulk of our M&A activity as foreign companies continue to look to expand into emerging markets. The value of domestic transactions fell by half y-o-y to make up just 17% of the total transaction value in 2022. Cross-border transactions, meanwhile, rose in value by 7%.

Thank our friends in the Gulf: The UAE led the inbound buying spree in 2022, with 24 transactions worth USD 2.3 bn, followed by the KSA with 27 transactions worth USD 1.7 bn. Gulf sovereign wealth funds contributed significantly to inbound M&A last year as they moved to support our economy and shore up the country’s dwindling FX reserves amid the fallout of the war in Ukraine. Abu Dhabi’s ADQ and Saudi Arabia’s Public Investment Fund spent some USD 3.1 bn to acquire significant minority stakes in some of the EGX’s strongest companies from the government.

Our take: We recorded twice the amount of M&A in Egypt last year compared to 2021, led by inbound M&A on the Gulf buying spree, per our internal trackers.