Meed | Acquisition with a view to transition

Acquisition with a view to transition

24 October 2024

Adnoc International’s $16.3bn bid for German plastics group Covestro, signed on 1 October, has called fresh attention to the Middle East and North Africa (Mena) region as a source of merger and acquisition (M&A) activity.

The deal by the UAE state energy company’s overseas business arm, which is the largest Mena deal of the year, is just one of a string of acquisitions by regional energy companies seeking to diversify both sectorally and in terms of geography. And energy – notably the low-carbon variant – has emerged as a key focus for buyers.

Within the Mena region, the GCC remains the mainstay of deal flow, with its clutch of sovereign wealth funds (SWFs) and government-related entities (GREs) underpinning activity through transformative agendas that are shaped by government-led ambitions to shift away from oil and gas and embrace newer areas of the economy.

The figures underscore the Gulf bias in M&A deal flow. Ten of the Mena region’s highest-valued M&As in the first six months of 2024 were concentrated in the GCC region.

The UAE and Saudi Arabia saw a combined 152 deals worth $9.8bn and were among the top Mena bidder countries in terms of deal volume and value, according to data from EY.

The largest transaction came in February, when private equity firms including Clayton Dubilier & Rice, Stone Point Capital and Mubadala Investment announced the acquisition of Truist Insurance Holdings, the US’s fifth-largest insurance brokerage, for $12.4bn – a sign that Gulf entities have the appetite and balance sheet to lock down opportunities in North America.

Indeed, according to EY, the US remained the preferred target destination for Mena outbound investors in the first half of 2024, with 19 deals amounting to $16.6bn.

Meanwhile, Gulf-based SWFs dominate in regional M&A activity in terms of deal value. Consultancy Bain & Company says they represented 86% of deal value in 2023, either directly or through portfolio companies.

Industrial focus

Sector-specific drivers have come to the fore for some participants, and that is evident in the spread of M&A activity. Take Saudi Arabia’s Public Investment Fund (PIF), which acquired steel companies Al-Rajhi Steel and Hadeed last year, from Rajhi Invest and Saudi Basic Industries Corporation, respectively, creating a national champion in a domestic steel sector that has consolidated.

Similarly, Adnoc’s Covestro acquisition confirms the prominent role that national oil companies continue to play as they morph into energy companies with more diverse product slates, and in turn are required to grow inorganically at times.

The Covestro deal represents a similar move to the PIF’s steel sector play last year. The German company would become a key plank in Adnoc’s ambition to create a speciality chemicals business. In a similar way, Borealis, in which Adnoc is a minority stakeholder, acquired Austrian chemicals group Integra Plastics in a deal announced in April 2024.

“The acquisitions from Adnoc are in line with a vision that they set out [in 2017], when the company restructured and broadened its scope to be a global business, looking actively for global opportunities to grow and diversify,” says Alice Gower, a partner at Azure Strategy.

She says that the interest in the European downstream sector is “a really smart move, because it not only ensures a market for their products, but it replaces Russian supplies and creates a dependency between Europe and, in this case, the Saudis or Emiratis”.

UAE companies’ interest in buying into European industrial firms has been evident this year. February saw Adnoc complete its long-running effort to acquire a 24.9% stake in Austrian petrochemicals firm OMV, and in May, state held Emirates Global Aluminium completed the acquisition of German aluminium recycling firm Leichtmetall Aluminium Giesserei Hannover.

Another geographic theme has seen GCC firms target Asia and Africa – the latter increasingly a focus in terms of its resource opportunity, as well as its capacity to provide a growing consumer market with an emergent middle class.

Last year, Asia figured in some of the biggest deals involving Mena companies, such as the $2bn investment by the UAE’s Mubadala in Chinese fashion retail firm Shein, and Qatar Investment Authority’s purchase of a $1bn stake in India’s Reliance Retail Ventures.

Resources – particularly transition minerals – look set to remain a prominent theme for Mena dealmakers. In Africa, the UAE’s International Resource Holding, an affiliate of Sheikh Tahnoon Bin Zayed-headed International Holding Company, completed its acquisition of Zambia’s Mopani Copper Mine in March 2023, paying $1.1bn for a 51% stake. The UAE firm has moved into critical metals and sees this entity as playing a key role in developing the metal and mining supply chain.

Energy transition

The energy transition will continue to push Gulf acquirers’ M&A agendas.

Abu Dhabi’s Masdar, eyeing a target 100GW of clean energy by 2030, has become an active M&A player. In June, it acquired a 67% stake in Greek company Terna Energy for $2.9bn.

Deal flow at Masdar has been brisk, with a deal struck in September to acquire renewable energy provider Saeta Yield from US investment firm Brookfield for $1.4bn, handing it significant power assets in Spain and Portugal and a 1.6GW development pipeline.

Masdar has also been growing its US foothold, closing a deal in October for a 50% stake in US renewables company Terra-Gen, which boasts a wind, solar and battery storage portfolio of 3.8GW.

Meanwhile, with the PIF and Mubadala both committed to net-zero targets by 2050, in addition to working to decarbonise their existing portfolios, the funds are investing in green assets and in technologies that support decarbonisation, notes Bain & Company.

Azure Strategy’s Gower cautions against reading too much into the professed diversification agenda, however.

“Everybody talks about diversification, but if you actually look at what they’re investing in, it’s not that far from the fossil fuel industry,” she says.

“There is a vertical integration logic: you’re upstream and you want to then become more involved in midstream and downstream – that makes sense. But the businesses that they are buying are pretty low-margin, so there has to
be a different reason behind this approach.”

Instead, defensive motivations are in play. “It is about capturing shares in assets across different markets in order to spread risk, and then diversifying revenue streams away from direct exports, given their geographic location,” she says.

“Look at what is going on in the region at the moment, and the increase in shipping costs, the instability and insecurity risk.”

Banking mergers

M&A in the Mena banking sector has slowed down in the past five years, following a spate of deals that mainly reflected the reordering of state holdings in large Gulf banks.

In March 2024, the Egyptian subsidiary of Bahrain’s Bank ABC completed its merger with the Egyptian subsidiary of Lebanon’s Blom Bank, tripling Bank ABC’s market share in Egypt.

Market speculation is now centring on consolidation within Kuwait’s banking sector.

The proposed merger of Boubyan Bank and Gulf Bank – Kuwait’s third- and fifth-largest lenders – would create an Islamic lender with assets of about $53bn.

“GCC banks in general have been keeping their options open because these are small, concentrated economies and markets, and therefore international expansion will help diversify business models and improve profitability,” says Redmond Ramsdale, senior director for banks at Fitch Ratings.

M&A moves have taken Gulf banks into the wider region.

“External growth is part of some GCC banks’ strategy to diversify business models and improve profitability,” says Ramsdale. “By deploying capital into high-growth markets, they may be able to compensate for weaker growth in their home markets.”

In the wider Mena region, M&A activity in 2025 will be driven by the big regional SWFs and GREs. The need to decarbonise their portfolios will shape inorganic growth strategies as they look to buy lower-carbon assets ‘off the shelf’ to meet net-zero and emission-reduction targets.

With sizeable acquisition budgets at their disposal, these players do not lack the financial firepower to target assets that will help them meet their goals.

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James Gavin

Exclusive from Meed

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Kuwait halves drilling contractor pool
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Abu Dhabi expects 45% emissions cut as electricity demand rises
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Jedco maps next phase of Jeddah airport expansion
22 September 2026

Jeddah Airports Company (Jedco) has outlined plans for the next phase of expansion at King Abdulaziz International airport (KAIA) in Jeddah.

The programme comprises six upcoming contractor packages spanning airside works, terminal upgrades and utilities as Jedco advances its long-term expansion plans.

The opportunities include airfield rehabilitation; a five-year construction framework covering multiple workstreams and facility types; a Terminal 3A (T3A) package; Terminal 1 (T1) optimisation; a fuel farm; and Concourse C works.

The packages cover terminal buildings and ancillary facilities, runways, taxiways and aprons, hangars, fuel systems, airside facilities, supporting infrastructure and utility networks.

Tendering and award activity will be staggered over the next two years. Airfield rehabilitation is targeted for Q3 2026. The construction framework is scheduled for Q4 2026 and will run for five years.

The T3A package is planned for Q1 2027 and will be delivered under an early contractor involvement contract. Local contractors are encouraged to bid as part of a joint venture with an experienced international partner.

T1 optimisation is planned for Q4 2027, the fuel farm for Q2 2027, and Concourse C – currently the latest of the six milestones – for Q2 2028.

The new packages add detail to Jedco’s wider expansion plans disclosed in 2023, when it was reported that the company would invest SR115bn ($31bn) to increase KAIA’s capacity to 114 million passengers a year, with an overall completion target of 2031.

Jedco has recently awarded several significant contracts linked to the airport’s upgrade programme.

In November 2024, a joint venture of local Algihaz Contracting and Turkey’s TAV was awarded a contract to rehabilitate the South Terminal to serve Umrah and Hajj pilgrims, with Singapore’s Surbana Jurong acting as consultant.

Earlier that year, Jedco also awarded France’s Alstom a contract to increase the capacity of the Innovia automated people mover at Terminal 1, including new cars and upgrades to signalling, communications and controls.

Surbana Jurong is expected to play a leading role in future KAIA expansion plans and is currently providing technical advisory and project management consultancy for more than 100 capital projects for Jedco, valued at over SR6bn ($1.6bn).

These upgrades are expected to boost KAIA’s annual capacity in line with Saudi Arabia’s Vision 2030 and National Aviation Strategy, enhancing the experience for domestic travellers and millions of Hajj and Umrah pilgrims.

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Yasir Iqbal

Contractor wins $105m Medina university hospital deal

22 September 2026

Riyadh-based construction firm Al-Mansouria General Contracting Company has been awarded a SR396m ($105.6m) contract to complete the remaining construction works on the Taiba University Hospital project in Medina.

The contract scope includes structural completion, remaining civil works, mechanical, electrical and plumbing installations, specialised clinical fit-outs and medical gas infrastructure to bring the long-stalled facility into operation.

Located on King Khalid Road along Medina’s Third Ring Road, the teaching hospital will have a capacity of 563 beds.

The contract duration is three years, with delivery targeted for late 2029.

The latest award follows a prolonged procurement cycle that began more than a decade ago as part of a public budget drive to expand Saudi Arabia’s higher education infrastructure.

The project’s first phase was initially signed in December 2011 with local firm Al-Muhaidib Contracting under a SR500m ($133.3m) contract.

Groundbreaking for the eight-storey complex took place in July 2013. The project covers a gross floor area of more than 200,000 square metres.

Progress stalled shortly thereafter due to reported structural delays and the reallocation of public capital budgets across the kingdom’s social infrastructure pipeline.

READ THE SEPTEMBER 2026 MEED BUSINESS REVIEW – click here to view PDF

Nuclear power ambitions gather pace; Kuwait keeps dealmaking alive despite war; Region invests in raising gas processing capacity.

Distributed to senior decision-makers in the region and around the world, the September 2026 edition of MEED Business Review includes:

> AGENDA: Gulf nuclear revival takes shape

> MARKET FOCUS: Kuwait keeps dealmaking alive under fire

> INDUSTRY REPORT: Gas processing takes centre stage in Mena region

> INTERVIEW: Emsteel persists with business productivity and efficiency

> TUNNELS: The Gulf’s next construction boom is happening underground

To see previous issues of MEED Business Review, please click here

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Yasir Iqbal

Oman tenders Thumrait Industrial City infrastructure
22 September 2026

Oman’s Public Establishment for Industrial Estates (Madayn) has tendered an estimated RO15m ($39m) contract to develop infrastructure for Thumrait Industrial City.

The tender was issued on 14 September, with bids due by 12 November.

The scope covers site-wide utilities and services, including an internal road network, stormwater channels and culverts. It also includes installing sewerage and water networks, along with landscaping works.

In addition, Madayn intends to build plug-and-play industrial units and a facilities building.

The first phase of the development will cover about 120,000 square metres (sq m).

Thumrait Industrial City is located in Oman’s Dhofar Governorate and spans an area of more than four million sq m.

The project location is close to concession blocks, quarry sites and the Najd agricultural areas. It is positioned to attract industrial investments in sectors such as mining and minerals processing (including gypsum and cement), food production, and a range of light and general manufacturing activities.

In March, Madayn said it is preparing to invest more than RO245m ($637m) to upgrade and expand infrastructure across its industrial cities between 2026 and 2030, as part of efforts to attract new investment and advance economic diversification.

According to media reports, Madayn chief executive Dawood Bin Salim Al-Hadabi said the programme is part of an expanded, phased plan aligned with Oman Vision 2040 and the authority’s long-term Madayn 2040 strategy.

The objective is to deepen Oman’s industrial base and spread growth across the sultanate’s governorates.

Madayn said the pipeline comprises about 90 strategic projects to improve industrial-city infrastructure, extend serviced land and increase the overall ease of doing business for investors.

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Yasir Iqbal
Kuwait halves drilling contractor pool
22 September 2026
State-owned upstream operator Kuwait Oil Company (KOC) has reduced the number of approved contractors for onshore drilling and shallow-well maintenance from 51 to 24.

Firms that are no longer qualified include major contractors such as Italy’s Saipem, Oklahoma-based Helmerich & Payne and Houston-based Patterson-UTI Energy.

The latest list still includes a wide range of Kuwaiti, regional and international companies, according to the latest update on its electronic system, published on 21 September 2026.

The full list of contractors that are now qualified to participate in tenders is:
- Burgan Company for Well Drilling, Trading & Maintenance (Kuwait)
- Kuwait Drilling Company (Kuwait)
- Sun Drilling Kuwait (Kuwait)
- TDL Kuwait for Oil Rigs & Natural Gas Extraction Activities, Services and Facilities (Kuwait)
- United Precision Drilling (Kuwait)
- Abraj Energy Services (Oman)
- Adnoc Drilling Company (UAE)
- Arabian Drilling Company (Saudi Arabia)
- Anton Oilfield Services (China)
- China Oilfield Services (China)
- Egyptian Drilling Company (Egypt)
- CNPC Bohai Drilling Engineering Company (China)
- Great Wall Drilling Company (China)
- John Energy (India)
- Kerui Oilfield Service (China)
- KCA Deutag Drilling (Germany)
- Mohammed Al-Barwani Petroleum Services (Oman)
- Nabors Drilling International (US)
- National Drilling & Services Company (Oman)
- Sea & Land Drilling Contractors (Oman)
- Sinopec International Petroleum Service Corporation (China)
- Karamay Jianye Energy (China)
- Modern Drilling Company (Egypt)
- Grey Wolf Drilling International (US)
An earlier list, which was published on 11 February, included 51 qualified companies.

The reduction in qualified drilling contractors follows KOC’s notice on 27 April this year, informing existing qualified contractors that they would need to reapply.
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Wil Crisp

Abu Dhabi expects 45% emissions cut as electricity demand rises

21 September 2026

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Abu Dhabi-based Emirates Water & Electricity Company (Ewec) expects carbon emissions from power and water production to fall by more than 45% by 2035 as the UAE expands renewable energy and reverse osmosis (RO) desalination.

The state offtaker's latest long-term system planning forecasts emissions will decline from about 42 million tonnes in 2019 to approximately 23 million tonnes in 2035.

The reduction is expected despite annual electricity demand that is forecast to rise by about 70% in 2026-33.

Ewec said the expansion of renewable energy and the shift towards RO desalination will be the principal drivers of the reduction.

The company plans to increase Abu Dhabi's solar capacity to 14GW by 2030 and more than 35GW by 2035. This will be supported by up to 15GW of battery storage capacity.

According to regional project tracker MEED Projects, Ewec has over $16bn-worth of power and water projects in the execution stage as part of its long-term procurement programme to increase renewable energy and low-carbon water production capacity.

This includes a 5.2GW Abu Dhabi solar and battery energy storage system (bess) round-the-clock renewable energy project, as well as three 1.5GW solar photovoltaic independent power projects (IPP): Al-Ajban, Al-Khazna and Al-Zarraf.

It also comprises the 1GW Al-Dhafra open-cycle gas turbine power plant, the 2.5GW Taweelah C combined-cycle gas turbine (CCGT) plant and a separate 400MW bess IPP.

As previously reported, it is expected that the developer's agreement for the 3.3GW Al-Nouf 1 CCGT IPP will be signed by the end of the year, while contractors are preparing to submit bids for a separate 2.6GW power plant project in Ajman.

The expansion of solar and battery storage is expected to reduce the system's reliance on gas-fired generation. However, gas-fired generation will continue to provide flexibility to support the system and balance intermittent renewable power output, according to Ewec.

The offtaker also expects RO desalination to account for more than 95% of total water production by 2035, with the procurement programme supporting the Abu Dhabi Department of Energy's Clean Energy Strategic Target 2035 for electricity production and the UAE Net Zero by 2050 Strategy.