ME M&A deals at 2-year high, near $10bn

Value of mergers and acquisitions jumps five-fold

The value of mergers and acquisitions (M&As) targeting companies based in the Middle East has leapt more than five-fold on a year-on-year basis, from $1.7 billion in in Q3 2011 to $9.6 billion in the same quarter this year, a new report published today says. 

According to Bureau van Dijk’s Zephyr database, which tracks M&A deal-making around the world, the latest quarter has delivered the strongest performance for the Middle East region in the last two years. 

While deal-making is up 463 per cent y-o-y, it is also up 153 per cent quarter-on-quarter, from $3.8 billion in Q2, 2012, data shows. 

“Volume weakened slightly quarter-on-quarter, dipping 4 per cent from

68 to 65 deals, and was also lower than Q3 2011 when 74 transactions were signed off,” the zephyr report states. “The strong value result taken against lower transaction numbers suggests an increase in big ticket deals in the three months under review,” the analysis highlights. 

The quarter’s biggest transaction amounted to more than 40 per cent of total regional deal-making, according to the report. National energy company Qatar Petroleum reduced its stake in conglomerate Industries Qatar in the quarter’s largest transaction valued at around $3.9 billion. Qatar Petroleum sold a 19 per cent interest in the Doha-based group to another state-owned entity, General Retirement and Social Insurance Authority, thus paring its stake from 70 to 51 per cent. 

A further two deals surpassed $1bn in value, these being Qatar Telecom’s takeover offer for National Mobile Telecommunications Company – better known as Watanyia – worth $2.2bn, and a $1.7bn rights issue by Mobile Telecommunications Company Saudi Arabia, also known as Zain. 

The Industries Qatar transaction helped to push metals into top spot as the highest value sector of the quarter, accounting for almost all of the $4bn invested in the segment. The figure was a huge increase on the previous quarter’s $460 million. 

Other industries which performed well in the period included banking, where value rose from $540 million to $902 million, education and health, which rose from $11 million in Q2 to $251 million, construction and wholesale and retail. 

By volume, the banking sector recorded the greatest number of deals with 24 transactions signed off, almost double the 13 recorded in the previous quarter and substantially more than the 8 achieved in Q3 2011. 

Qatar led the region by value, bringing in $3.9bn of deal-making, the highest figure recorded for the country in the last two years. Kuwait followed with $3bn, again the highest amount achieved in the last eight quarters under review, and Saudi Arabia came third with $19bn, significantly higher than the $197 million in the preceding quarter. 

The UAE fared less well in the three months under review, as value declined 60 per cent quarter-on-quarter from $867 million to $351 million. Oman also experienced a downturn, falling from $462 million in Q2 to $157 million. 

By volume, Jordan topped the table with 25 deals signed off, three times more than in the previous quarter. Kuwait and the UAE chalked up12 deals each.

 

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