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Fri 8 Jun 2018 12:06 AM

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Reforms set to stimulate Gulf deal market, says PwC

New report says deal volumes set to pick up towards end of 2018 and into 2019

Reforms set to stimulate Gulf deal market, says PwC

Transformational reform is playing its part in stimulating the deal market across the Gulf region, according to PwC Middle East.

Its new report said that while deal volumes have decreased over the past two years, there are some positive signs of activity picking up and this is expected to gain momentum towards the end of 2018 and early 2019 as the market begins to embrace the “new normal”. 

It added that achieving organic growth and bridging the valuation gap in certain sectors are among the challenges that investors and owners continue to face in the region.

PwC said governments across the region are creating an enabling environment in an effort to increase investment activity by introducing various transformational reforms including, for example, recent announced changes in merger and acquisition (M&A) regulations and foreign ownership rules.

In Saudi Arabia, the government is updating and introducing new laws to diversify its economy as it seeks to create an investor-friendly climate for privatization. In addition, the UAE’s digitization agenda for 2021 will create M&A opportunities across a range of sectors including financial services, transportation and logistics and retail, the report noted.

Ovais Chhotani, transaction services director at PwC Middle East said: “We are currently seeing an interesting shift taking place in the regional M&A landscape with newer sectors emerging focused on technology and digitisation, corporates pursuing M&A more aggressively to drive growth and the ongoing privatisation agenda of regional governments opening up interesting new opportunities for both regional and international investors. 

"At the same time, we continue to see investor interest in traditional sectors such as education and healthcare where regionally, growth opportunities still exist.”

From PwC’s recent Middle East 2018 CEO survey, more than half of those surveyed are considering a strategic alliance or joint venture in order to drive corporate growth and profitability as organic growth proves more challenging.

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