High rate will continue into the middle of 2022. AS we recover from pandemic saudi market saw m&a jump by over 75% in 2021 compared to last year. this is mainly inorganic deals in the IT, Healthcare and petchem sectors.
Future is bright for KSA. The kingdom has transformed into a business market for global organizations looking for new merger and acquisitions. Currently, KSA market is estimated to be around USD 1 billion with activities in education, energy and e-commerce. Despite current challenges, next few years could be a period of growth for companies push to boost margins and cut costs.
I would say that M&As are on the rise in Saudi as there is a vision and ambition to bring a lot of capabilities in kingdom in an accelerated manner. As we know, when M&As are executed properly they enable the quick transfer and realization of value from one organization to another. M&As are also fast in nature in comparison to the approach of establishing new entities or JVs. For these reasons, M&As are an ideal approach to help localize and diversify the Saudi economy in a rapid manner.
especially during COVID, there were huge opportunities within the Saudi Market. I strongly believe COVID had a huge impact on the M&A transactions. There is a strong information asymmetry, not all parties have the same amount of information. To add, some could argue that there was a significant discount in stock prices and huge opportunity to acquire companies with a good deal.