Middle East M&As at 2-year low

Deal-making activity targeting Middle Eastern businesses dropped in terms of both volume and value for the second consecutive month in October, according to Bureau van Dijk’s Zephyr Monthly M&A Report.

The year-on-year decline for the month is a stark 85 per cent in value, from $2.95 billion in October 2010 to $425 million in October this year, while volumes declined 78 per cent, from 86 deals to just 19, in the same period.

The UAE saw just one deal announced last month – the takeover of Dubai Bank by Emirates NBD for an undisclosed sum – as opposed to five deals for $237 million last October. The region overall is going slow on deal-making, with just five of the 19 deals announced in October worth more than $1 million, and with just one deal hitting triple digits.

The month’s largest deal – Kuwaiti investor Development Enterprises Holding Company’s acquisition of domestic energy business Aref Energy Holding Company – was valued at $265 million, or 62 per cent of the total regional value for October and more than four and a half times the $58 million consideration of the month’s second largest deal, Al Baraka Islamic Bank’s purchase of a majority share in Saudi enterprise Altawfeek Financial Group.

Thanks to both the highest and third highest value transactions of the month taking place in the country, Kuwaiti targets accounted for 73 per cent of all deal value in October 2011. Nevertheless, at $312 million the value of Kuwaiti deals was down on both the preceding month ($363 million) and the year-ago period ($1.91 billion).

Kuwait was far ahead of second-placed Saudi Arabia, which attracted just $58 million in the month under review. Jordanian businesses were the most frequently-targeted in October 2011, a position the country has occupied since well before the year-ago period. Twelve deals took place in Jordan compared to two in both Kuwait and Oman, which came joint second for transaction volume.

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