Merger and acquisition activity (M&A activity) in Saudi Arabia is expected to witness a leap during 2019, according to a recent survey conducted by KPMG.
The survey is based on interviews with more than 1,300 executives from large companies across the world and in key industry sectors, including asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications.
Abdullah Al Fozan, CEO of KPMG, said that local and foreign investors have gained confidence in the Saudi market due to the positive fundamentals and continued growth of the economy supported by the ongoing economic reform under vision 2030.
“Confidence is being driven by international investors keen to invest in long-term projects, which reflects back onto international players looking to expand into promising geographies that offer high returns while operational costs remain low,” the rating agency said.
He added that around 84% of global CEOs have a moderate or high M&A appetite for the coming three years.
“Mergers and acquisitions (M&A) activity in Saudi Arabia will increase in the coming years, as the government carries out reforms to diversify the Kingdom’s economy and opens up the market for Foreign Direct Investments (FDI),” Al Fozan commented.
The survey found out that 94% of global business leaders are optimistic and have confidence in the Saudi market.
Moreover, 63% of CEOs said their first priority for geographical expansion over the next three years is emerging markets, compared to the 36% who are prioritizing developed markets.