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29 March 2024

2010 on track to be driest year for Mideast M&As

With mergers and acquisition (M&A) deals worth just a shade above $7bn being made in the Middle East until September 2 this year. (REUTERS)

Published
By Vicky Kapur

With mergers and acquisition (M&A) deals worth just a shade above $7bn being made in the Middle East until September 2 this year, 2010 may well turn put to be the driest year for M&A activity in the region since 2005.

According to Mergermarket data, which dates back to 2005, after a promising start to this year with Middle East M&A deal-making aggregating close to $4bn in the first quarter itself, deal-flow has slowed down to a trickle since then.

The second quarter of 2010 saw deals worth just $1.4bn while the third quarter so far has seen slightly better deal-flow at $1.7bn.

Nevertheless, in the absence of any solid stimulus and unless yuletide cheer buoys the market, the year 2010 may well end up as the driest year for Middle East deal-making since 2005.

Sector-wise, financial services (28 per cent) and real estate (14.1 per cent) lead the acquisition and consolidation charts by the value of deals made.

This isn’t surprising considering that these are the two sectors most affected by the ongoing economic deceleration.

In terms of volumes, or the number of deals made, TMT (telecom, media and technology) leads the charge with the sector witnessing 23.6 per cent of all deals stuck this year, followed by industrials and chemicals (16.9 per cent).

Globally, however, after a slow first half, M&A value hit $267 billion in August; making it the biggest month for M&A deals since June 2009, according to Thomson Reuters data.

The global activity was bolstered last month by BHP Billiton’s $43.2 billion bid for Potash Corp of Saskatchewan.