Opinion Egypt's M&A Market Thrives Amid Reforms And Investment

(MENAFN- Daily News Egypt) Egypt experienced a strong rebound after a series of macroeconomic challenges in 2023, with a significant increase from 97 deals to 120 in 2024, marking a 23.7% year-on-year growth – the highest in the Middle East. Although this level is lower than the peak levels seen in 2022, the current surge can be partly attributed to Egypt's ongoing economic reforms and efforts to attract foreign direct investment, particularly in infrastructure, fintech, and consumer markets.

The country also recorded 77 corporate transactions in 2024, highlighting a strong private sector involvement in Egypt's M&A market, signaling business confidence, economic diversification and growth opportunities.

The largest M&A deals in 2024, included:

• The US$800 million acquisition of Legacy Hotels by Arab Co for Hotels and Tourist Investments, reinforces Egypt's growing tourism and hospitality sector.
• MNT Halan, a fintech and digital lending firm, saw investments worth US$157.5mn from a private investor group, indicating continued growth in Egypt's fintech sector.
• Egypt-based private equity firm B Investments Holding's acquisition of a 90% stake in Orascom Financial Holding for US$49.33mn, marks a significant milestone in the financial sector.

Privatisation accelerated
As Egypt navigates macroeconomic stability amid regional tensions and declining Suez Canal trade, its privatisation efforts are gradually reducing government control and boosting private sector participation. In December 2024, the IMF approved a $1.2 billion disbursement under Egypt's $8 billion programme, on the condition of accelerating privatisation. As part of this push, the Central Bank of Egypt began the sale of a 30% stake in state-owned United Bank through an initial public offering (IPO) on the local exchange, as part of its plans to attract foreign investment through the sale of public assets.

Maged EzzEldeen

Tax incentives
Egypt is intensifying efforts to attract private equity (PE) and venture capital (VC) by introducing tax incentives and economic reforms aimed at accelerating investment. The government rolled out tax incentives for investors in high-growth sectors in the second half of last year, particularly in technology, renewable energy, and manufacturing.

Furthermore, the April 2024 amendments to Egypt's Anti-Trust Law No. 3 of 2005 has reshaped Egypt's M&A landscape by transitioning from a post-merger notification system to a pre-merger control regime. This change has introduced greater clarity and predictability for investors, streamlined approvals, set clear thresholds for notification and ensured compliance with global best practices. These reforms are expected to create a more investor-friendly environment and sustain Egypt's upward trajectory in M&A deal volumes.

Foreign investment and regional Sovereign Wealth Fund (SWF) interest: Egypt's plan to transfer state-owned enterprises to its US$12 billion sovereign wealth fund, aims to maximise asset returns, encourage private sector partnerships, and attract foreign investment. We also see SWFs of the Gulf Cooperation Council (GCC), such as Saudi Arabia's Public Investment Fund, Qatar Investment Authority, the UAE's Abu Dhabi Developmental Holding Company (ADQ) increasing investments in Egypt's industrial zones, tourism and oil and gas sectors – signaling confidence in the market.

Maye Ayoub

In February 2024, under the US$35bn land deal the ADQ-led consortium secured the rights to develop 130 million square meters along Egypt's north coast at Ras El Hekma, while US$11bn of Emirati deposits held in Egypt's central bank would be released, enabling investments in key projects across the country to support economic growth and development. Meanwhile in September 2024, PIF announced a $5b investment into Egypt to boost bilateral relations, while in November 2024, Qatar Energy acquired 23% of Chevron in an offshore exploration block located in Egyptian waters, demonstrating Qatar's commitment to Egypt's oil and gas sector.

Looking ahead
Egypt's recovery in deal volume in 2024 underscores renewed investor confidence, supported by economic reforms, privatisation and tax incentives. With the UAE's Emirates NBD initiating the plans to acquire a 45% stake of Banque du Caire for US$1 billion, it also highlights the growing momentum in Egypt's financial sector. With private-sector-led M&A transactions rising, key investment opportunities lie in finance, infrastructure, tourism and digital transformation. As Egypt continues to enhance its investment climate, 2025 is set to be another pivotal year for dealmaking and economic expansion.

Maged EzzEldeen, Egypt Country Senior Partner and Deals Leader, PwC Middle East

Maye Ayoub, Deals Partner, PwC Middle East

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