Meed | M&A market boosted by energy deals

M&A market boosted by energy deals

24 October 2024

The mergers and acquisitions (M&A) market in the Middle East and North Africa (Mena) region received a significant boost on 1 October, when Abu Dhabi National Oil Company (Adnoc) finally secured agreement from German chemicals firm Covestro for a takeover worth €14.7bn ($16.1bn).

Assuming it is completed, it will be the largest acquisition to date by Adnoc, which is no stranger to large M&A transactions. Indeed, just 10 days later, the UAE energy giant said it had received all the necessary approvals to complete its purchase of a 50% stake in another chemicals producer, Fertiglobe, from Dutch-listed OCI, taking its total shareholding in the business to 86%. That €3.6bn deal had been announced in mid-December 2022.

Adnoc has been chasing the Covestro deal for some time, steadily ramping up its offer from an initial €55 a share to the eventual €62 a share.

On current projections, it looks set to be the biggest M&A deal involving a Mena company this year. Data compiled by LSEG Data & Analytics, part of the London Stock Exchange Group, points to it being among the 10 largest M&A deals anywhere in the world this year.

Rebounding trend

Overall, there were $46.6bn-worth of M&A deals involving a Mena company in the opening half of the year, according to LSEG. This was a 48% increase on the same period of 2023, by LSEG’s metrics, and was similar to the levels seen in 2020-22.

Of that, $28.6bn were deals involving a target company outside the region – the highest level for outbound deals in the first half of a year since 2007.

There were a further $17.6bn-worth of deals involving a Mena target company from January to June, of which $11.2bn were being pursued by acquirers from outside the region.

Deals with both a local acquirer and target amounted to $6.3bn – down 12% year-on-year and now at a seven-year low.

Beyond the Covestro transaction, there have been at least nine other deals worth more than $1bn so far this year. These include a $1.1bn deal for Austrian aircraft leasing company Macquarie AirFinance to buy a portfolio of 23 aircraft from Kuwait’s Alafco Aviation Lease & Finance. The deal was announced in February and followed a similar deal in 2023 between the two companies.

Others include a deal by Adnoc Logistics & Services to acquire oil tanker operator Navig8 for up to $1.5bn in a two-stage transaction; Microsoft’s investment of $1.5bn for an undisclosed stake in the UAE artificial intelligence (AI) company Group 42; and a $2bn investment by Alat, a subsidiary of Saudi Arabia’s Public Investment Fund, in convertible bonds issued by Chinese technology company Lenovo Group.

Abu Dhabi Future Energy Company (Masdar) has also been on the acquisition trail, announcing a $2.7bn investment in Greek renewable energy company Terna Energy in July. The same month, it also announced a deal with Italian firm Endesa to invest €817m for a 49.9% stake in a portfolio of 48 solar power plants with a total capacity of 2GW.

In September, Masdar announced a plan to buy energy developer Saeta Yield for $1.4bn, adding 745MW of wind and solar generating capacity in Spain and Portugal.

As with the Adnoc/Fertiglobe deal, other big transactions announced last year have been completed this year. Among them is the $1.4bn merger of Abu Dhabi Securities Exchange-listed Al-Yah Satellite Communications Company and Bayanat AI, which was unveiled in December and completed on 1 October.

There were $46.6bn-worth of M&A deals involving a Mena company in the opening half of the year

Not always a done deal

Not all announced deals go through, however. In April, Dubai-based engineering consultant Dar Al-Handasah Shair & Partners Holdings (Sidara) approached London-listed John Wood Group with a takeover offer. By late May it had made a fourth and final offer valuing the Aberdeen-headquartered firm at £1.6bn ($2.1bn). However, in early August Sidara backed out saying “in light of rising geopolitical risks and financial market uncertainty” it no longer intended to make a firm offer.

Even with such setbacks, the UAE has been the most active market for M&A deals in the first half of the year. Of the announced deals involving a Mena target, $9.7bn-worth have been for a UAE firm, according to LSEG. Saudi Arabia is in second place, with $3.1bn of the total.

On a sectoral basis, the financial services industry has accounted for most of the deals involving a Mena target, with $6.3bn of the total. Technology and telecommunications companies accounted for a further $3.2bn, while deals involving materials and industrial companies totalled $2.8bn and energy and power company deals were worth $1.6bn.

According to professional services firm Ernst & Young (EY), the region’s sovereign wealth funds, such as Abu Dhabi Investment Authority (Adia), the UAE’s Mubadala and Saudi Arabia’s PIF, have continued to lead the deal activity in the region, as they push ahead with government-directed efforts to diversify their home economies.

While the likes of Covestro and Terna are European, overall, it is the US that is the main destination for outbound M&A deals, according to EY. However, there have been some major deals announced involving other parts of the world too. In March 2024, Mubadala and Adia joined a consortium that spent $8.3bn to acquire a 60% stake in Chinese shopping mall manager Zhuhai Wanda.

Detailed data is not yet available for third-quarter activity in the Mena region, but the global trends point to a fairly active market. According to LSEG, global completed M&A advisory fees reached $23bn in the first nine months of the year, a 3% increase on the same period of 2023

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Dominic Dudley

Exclusive from Meed

Saudi Arabia raises electricity tariffs
26 October 2026
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026
Nakheel awards $259m Dubai Islands buildings contract
26 October 2026
Morocco plans second high-speed rail phase to Agadir
26 October 2026
Riyadh tenders King Salman Stadium works
26 October 2026

Saudi Arabia raises electricity tariffs
26 October 2026

Saudi Energy, formerly Saudi Electricity Company, has announced revised electricity tariffs, which will take effect on 1 January 2027.

The revised tariff schedule, published on the company’s official website, covers residential, commercial, industrial, agricultural, charitable and government customers.

The largest percentage increase in consumption rates is 16.7%, for residential customers using up to 6,000 kilowatt-hours (kWh) a month. Residential customers will pay 21 halalas/kWh for monthly consumption of up to 6,000kWh, up from 18 halalas. For consumption above 6,000kWh, the rate will rise from 30 to 33 halalas/kWh, a 10% increase.

The industrial tariff will increase by 15%, from 20 to 23 halalas/kWh. Commercial customers, private healthcare facilities and private educational facilities will pay 25 halalas/kWh, up from 22 halalas, for consumption up to 6,000kWh a month, and 35 halalas/kWh above that level, up from 32 halalas.

Tariffs for charities and government customers will also increase. In addition to consumption-based charges, customers will pay a fixed monthly fee based on the capacity of their electricity meter. This replaces the previous separate charge for meter reading, maintenance and billing, with VAT applied to the revised tariffs.

Electricity investment

The new tariffs coincide with changes to water consumption tariffs announced by the National Water Company, also effective from 1 January 2027.

King Salman Bin Abdulaziz Al-Saud directed support measures following a proposal presented by Crown Prince and Prime Minister Mohammed Bin Salman Bin Abdulaziz Al-Saud.

This includes raising the minimum wage required for Saudi nationals to count as full employees towards private sector localisation quotas under the Nitaqat programme.

The tariff changes come as Saudi Arabia plans substantial investment in its electricity infrastructure. In September 2025, Saudi Energy announced plans to invest SR220bn ($58.7bn) in power infrastructure projects between 2025 and 2030.

A June 2025 report by Fitch Ratings forecast negative free cash flow of about SR16bn a year over the period and rising leverage, reflecting the financial demands of the programme.

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Mark Dowdall
Dubai Municipality confirms AED3bn Tasreef drainage awards
26 October 2026

Dubai Municipality has confirmed it has awarded four contracts worth AED3bn ($817m) to expand the emirate’s stormwater drainage network by about 100 square kilometres under phase three of the Tasreef programme.

The projects will cover Jumeirah, Umm Suqeim, Al-Quoz, Al-Barsha, Al-Wasl and Al-Marmoom. The works include constructing and extending main stormwater drainage lines with diameters of up to three metres.

The four packages are part of Dubai’s AED30bn Tasreef programme, which aims to increase the emirate’s stormwater drainage capacity by 700% and reduce costs associated with pumping stations, network operations and maintenance by 20%.

The contracts have been awarded to China State Construction Engineering Corporation (CSCEC) and three local firms: Arifco Group, Nael Construction & Contracting (NCC) and Detech Contracting. Dubai Municipality did not state which projects the awards relate to.

According to sources, the contract awards include packages TF-15-C1, TF-15-C2 and TF-13-C1.

The first package, TF-15-C1, involves the construction of 21 kilometres of main and secondary drainage lines along Al-Wasl Road and in surrounding areas. It will cover Za’abeel 2, Al-Wasl, Jumeirah 1 and 2, Al-Bada’a, Al-Satwa and Dubai World Trade Centre. The estimated $100m contract was awarded to Detech in July, as exclusively reported by MEED.

The second package, TF-15-C2, covers the corridor between Sheikh Zayed Road and Al-Khail Road. It includes about 14km of main drainage lines serving Al-Quoz Industrial Areas 1, 3 and 4, and Al-Barsha 1. In July, MEED reported that CSCEC had won the engineering, procurement and construction contract for this project.

The third package, TF-13-C1, covers Al-Marmoom, where 23km of drainage infrastructure will be developed. According to a source, Arifco has been awarded this contract.

The final package covers Jumeirah and Umm Suqeim, where about 42km of main drainage lines will serve Umm Suqeim 1, 2 and 3; Umm Al-Sheif; Jumeirah 3; Al-Safa 1 and 2; and Al-Manara.

In May, MEED reported that NCC had been awarded a contract to build a sewage and stormwater drainage system, DS-204. However, it is unconfirmed whether this relates to the same project.

Earlier, in February, the municipality confirmed it had awarded contracts for five new projects under phase two of the programme to expand and strengthen Dubai’s stormwater drainage network.

These included two contracts awarded to Detech and one to CSCEC for stormwater drainage infrastructure. In addition, two consultancy contracts were awarded for the study and design of drainage systems in selected areas across the emirate.

Cumulatively valued at AED2.5bn, the new projects will serve 30 vital areas, spanning approximately 430 million square metres and supporting an estimated population of three million residents by 2040.

Previously, in April 2025, an earlier package of awards was announced under phase one of the Tasreef programme. The overall masterplan aims to expand Dubai’s rainwater drainage capacity by 700% by 2033.

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Mark Dowdall
Nakheel awards $259m Dubai Islands buildings contract
26 October 2026

Dubai-based master developer Nakheel, part of Dubai Holding Real Estate, has awarded local firm Parkway International Contracting a construction contract valued at about AED950m ($259m) for phases two and four of Bay Grove Residences on Dubai Islands.

The package covers 617 residential units across eight buildings, ranging from one to four bedrooms, together with basement structures, infrastructure and community amenities including swimming pools, sports courts and fitness centres.

Phase two comprises 360 homes across four buildings, with main construction scheduled for completion in late 2028.

Phase four includes 257 homes across four buildings, with completion targeted for the second quarter of 2029.

The award follows an earlier contract valued at about AED800m ($218m) awarded to local contractor Metac General Contracting Company for phases one and three, covering 537 homes across seven buildings.

Together, the two contracts total more than AED1.75bn ($476m) and account for all 1,154 planned homes across the 15 buildings of Bay Grove Residences.

Project activity on Dubai Islands has gathered pace in recent months. Earlier this month, Nakheel awarded local firm Mar Marine & Building Contracting a contract for marine and coastal works on Island B. The scope includes constructing breakwaters, removing existing rock revetments and creating a new 320-metre beach near the Bay Villas development, as well as remedial and refurbishment works along approximately 3 kilometres of the island’s western shoreline.

In August 2025, Nakheel awarded Fibrex Contracting a AED2.6bn ($708m) construction contract for the Bay Villas residential project. That followed a AED527m ($143m) contract awarded to Al-Nasr Contracting Company in April 2026 for primary infrastructure and utilities on Island B.

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Yasir Iqbal
Morocco plans second high-speed rail phase to Agadir
26 October 2026

Morocco has outlined a second rail investment cycle for 2030-35, which includes beginning construction of a high-speed rail extension from Marrakech to Agadir and connecting Essaouira to the national rail network.

The pipeline forms part of the government’s 2026-31 programme, presented to parliament last week.

The Marrakech-Agadir link is estimated to cost close to MD55bn ($5.5bn) and will cover a 240-kilometre (km) route through the High Atlas Mountains via Chichaoua. Civil engineering structures, including tunnels and viaducts, are expected to account for nearly 70% of the alignment.

In September, the government issued a decree declaring the Marrakech-Agadir and Chichaoua-Essaouira rail corridors to be of public utility, paving the way for land acquisition and expropriation procedures.

Under the long-term masterplan Plan Rail Maroc 2040, Essaouira is expected to connect to the network via a separate line branching off at Chichaoua, designed for operating speeds of up to 200km an hour. The mainline to Agadir is designed for speeds of up to 320km/h.

The 2030-35 cycle also includes rehabilitating the Casablanca-Khouribga-Oued Zem line; constructing a new line between Oued Zem and Beni Mellal via Bejaad, with a branch to Fquih Ben Salah; doubling and upgrading the 140km Benguerir-Safi line; expanding capacity on the Fez-Oujda corridor; and building new-generation passenger stations.

The plans follow Morocco’s ongoing MD134bn ($13.4bn) 2024-30 rail investment programme, which focuses on completing the Kenitra-Marrakech high-speed line ahead of the 2030 Fifa World Cup.

The programme also includes developing regional express network services across five regions, electrifying the Fez-Oujda line and completing a freight rail link to the Nador West Med port.

Work on the Kenitra-Marrakech line had reached about 30% by May 2026, with commercial services targeted to begin in September 2029.

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Yasir Iqbal

Riyadh tenders King Salman Stadium works

26 October 2026

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Saudi Arabia’s Sports Ministry has tendered a contract covering early works at King Salman International Stadium in Riyadh.

The scope includes enabling works, site preparation and initial construction activities.

The tender was issued on 11 October, with a submission deadline of 19 November.

The stadium will cover about 660,000 square metres (sq m) and seat 92,000. Facilities will include a 150-seat royal suite, 120 hospitality suites, 300 VIP seats and 2,200 dignitary seats.

The wider development will include sports facilities covering more than 360,000 sq m, including two training fields and fan zones; a closed sports hall; an Olympic-sized swimming pool; an athletics track; and outdoor courts for volleyball, basketball and padel.

The stadium is set to host the final of the 2034 Fifa World Cup and will serve as the Saudi national football team’s main base.

US-based architectural firm Populous is the lead architect for the stadium.

Construction of the stadium is expected to be completed by 2029.

The stadium will be located next to King Abdulaziz Park.

Firms submitted prequalification statements for the main design-and-build contract in February.

Saudi stadium plans

In August 2024, MEED reported that Saudi Arabia planned to build 11 new stadiums and refurbish four facilities for the 2034 Fifa World Cup.

Eight stadiums will be located in Riyadh, four in Jeddah and one each in Al-Khobar, Abha and Neom.

A further 10 cities will host training bases: Al-Baha, Jazan, Taif, Medina, Alula, Umluj, Tabuk, Hail, Al-Ahsa and Buraidah.

There are expected to be 134 training sites in the kingdom, including 61 existing facilities and 73 new venues.

Saudi Arabia was officially selected to host the 2034 Fifa World Cup during an online convention of Fifa member associations at the Fifa Congress on 11 December 2024.

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