Following a period of significant mergers and acquisitions (M&A) activity leading up to the FIFA World Cup, Qatar’s M&A market experienced a slowdown in 2023. This year however, a resurgence in M&A activity is being witnessed, writes Kamal Fayed, who leads PwC’s M&A business in Qatar.

The rebound being seen in 2024 reflects Qatar’s strong economic outlook as the country transitions from a hydrocarbon-based economy to a diversified, knowledge-driven one.

Notable deals this year include Gulf Drilling International’s $338 million acquisition of Seadrill. In line with the growing demand for clean energy and reducing reliance on fossil fuels, energy companies and private equity firms are increasingly targeting acquisitions in the renewable energy space.

In real estate, transactions worth QR8.16 billion highlight the country’s growing appeal for investors, while investments in infrastructure, digital technologies, and entrepreneurship demonstrate Qatar’s economic resilience.

An overview of five factors that are expected to drive M&A activity within Qatar in the coming months:

1: Robust outbound investments

Despite slower growth in domestic M&A activity, outbound investments from Qatar have remained robust. The transport and logistics sector has been particularly active, exemplified by QTerminals’ acquisition of the Kramer Group in the Netherlands.

Additionally, Qatar Airways’ recent acquisition of a 25% stake in Airlink – a South African carrier and a 25% stake in Virgin Airlines Australia (subject to approval from regulators), reinforces its strategic position in Africa and highlights the ongoing trend of strategic international investments.

2: Record listings on Qatar Stock Exchange

In 2023, the Qatar Stock Exchange saw a record number of listings, with four new entries across both primary and secondary markets. This momentum, however, faced challenges towards the end of 2023 due to rising interest rates and geopolitical tensions. Nonetheless, listing activity is expected to recover in the short term, reflecting a renewed investor interest and confidence in Qatar’s economic prospects.

3: Attracting foreign direct investment

A key focus of Qatar’s third National Development Strategy (NDS-3) is attracting foreign direct investment (FDI) into the country. In this context, the Simaisma Project, led by the Ministry of Municipality and developed by Qatari Diar Real Estate Investment Company, is set to become a new cultural landmark, aimed at empowering the private sector and boosting FDI.

4: Increased drive for PPPs and privatisation

An additional significant driver for M&A activity in Qatar is the increased focus on public-private partnerships (PPPs) and the privatisation of national assets. As part of the broader strategy to attract FDI, the Qatari government is actively promoting PPPs to leverage private sector expertise and investment in key infrastructure projects.

5: Digital and tech transformation

Qatar has strategically invested in digital infrastructure such as cloud services and high-speed connectivity, and has strengthened its cybersecurity measures for data protection. Key initiatives, such as the digital factory, aim to transform the government into a citizen-centric service hub, facilitating seamless interactions and improving service delivery.

The road ahead

As Qatar continues to pursue its ambitious goals of economic diversification and global influence, several key trends will define its trajectory in the next six months, particularly in the areas of outbound investment, foreign direct investment, and private sector engagement.

Qatar is set to remain a highly active player in outbound investments, with the Qatar Investment Authority (QIA) leading the charge. QIA’s global investment strategy is focused on diversifying its portfolio and expanding internationally, with significant investments in sectors such as renewable energy, technology, and real estate.

At the global level, Qatar is also strengthening partnerships through key government-to-government agreements with countries, such as Kazakhstan and Rwanda. In Kazakhstan, Qatar is helping boost gas production by 18% with new processing plants, while also supporting energy development with power and hydroelectric projects. In Rwanda, the focus is on enhancing trade, finance, and investment ties.

On the home front, Qatar is ramping up efforts to attract FDI through investment-friendly policies. A major initiative is the Simaisma Project, an 8-million-square-metre development featuring a resort and entertainment attractions, set to boost tourism and diversify the economy beyond oil.

Qatar’s bold initiatives reinforce its commitment to cementing its position as a leading regional and global economic powerhouse, as it moves towards a more sustainable and diversified landscape.