Deal mandates are still coming thick and fast throughout the Middle East and North Africa (MENA) despite the ongoing war in Israel/Palestine, dealmakers said.

Mandates are plentiful, especially in cybersecurity, digital transformation, food and beverage, logistics, and even the foundational sectors of building materials and contracting, according to Marc Nassim, Partner and Managing Director at Awad Capital.

Sovereign wealth funds (SWFs) like Saudi Arabia’s Public Investment Fund and ADQ and Mubadala of the United Arab Emirates (UAE) will continue to be sources of mandates, Nassim said. Other government-related entities such as e&, Batelco, Ma’aden and SABIC will also generate activity, he added.

Abu Dhabi National Oil Company’s (ADNOC) [ADX:ADNOCDIST] takeover talks with chemicals conglomerate Covestro [ETR:1COV] could yield a megadeal, with a potential valuation of EUR 14bn, as reported.

Meanwhile, private equity (PE) firms are a growing source of mandates in the region, Nassim said. One PE situation to watch is GEMS of the UAE, which has a score of 55 out of 100, according to Mergermarket‘s Likely to Exit (LTE) predictive algorithm.* It is seeking a debt refinancing ahead of an exit, as reported.

One Dubai-based M&A advisor said that PE investors are keen to capitalize on M&A prospects in the region, particularly in areas like healthcare, education and hospitality, which have matured and can show promising returns on investment. Looming retirement can yield mandates on the sell side, he said, adding that PE could back management buyouts (MBOs) in these circumstances.

M&A revenues for the Middle East and Africa dipped to USD 400m in 2023, down from USD 670m in 2022, in line with global fees as M&A sank in the high-interest rate environment and executives shied away from inorganic growth, according to Mergermarket data**. Saudi Arabia was the top fee-generating country in MENA, netting investment bankers more than USD 100m.

More than 70% of last year’s fees last year was driven by three sectors: financial institutions, energy and natural resources, and technology.

*Mergermarket’s LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.

**Mergermarket revenue data: Mergermarket uses a proprietary revenue model to estimate investment banking fees across four key segments: M&A, equity capital markets (ECM), bonds or debt capital markets (DCM), and loans. Mergermarket awards M&A fees 10% upon deal announcement and 90% upon completion.