UAE leads as ME M&A activity doubles to $15.7bn

Middle Eastern M&A activity recorded deals worth $15.7 billion during the first nine months of 2012, more than double the activity seen during the same period in 2011 ($7.5 billion), and the strongest first nine months since 2008. 

According to Thomson Reuters’ investment banking analysis for the Middle East region for the first nine months of 2012, the UAE has emerged as the most active country in the region with $4 billion of deals. 

“In respect to M&A activity during the first nine months of 2012, telecommunications was the most targeted industry in the Middle East with $6.4 billion. The United Arab Emirates was the most active Middle Eastern country with $4 billion of the total M&A activity so far during 2012,” said Russell Haworth, Managing Director, Middle East & North Africa, Thomson Reuters. 

In respect to investment banking, Middle Eastern fees reached $402.2 million during the first nine months of 2012, a 23 per cent increase from the first nine months of 2011 when fees reached $327.5 million. 

“Investment banking has seen strong activity across Middle Eastern markets during the third quarter of 2012. This is clearly evident by the fees generated from the equity capital markets underwriting which reached $81.5 million. This marks the strongest first nine months for fees in the region since 2008,” Haworth added. 

Middle Eastern debt capital markets fees during the first nine months of 2012 reached $81.9 million, nearly double the $41.9 million seen during the same period in 2011. On the other hand, M&A fees recorded $103.3 million during the first nine months of 2012, down 14 per cent from the same period last year ($120.3 million). 

“Islamic debt issuance reached $23.4 billion from 63 issues during the first nine months of 2012, an increase of 50 per cent from the same period last year, and the strongest first nine months since 2008. The top Islamic issuer nation during the first half of 2012 is Malaysia with 57 per cent of the activity, while the strongest industry is the financial sector,” Haworth said. 

Fees from syndicated lending reached $135.5 million, up 38 per cent over the first nine months of 2011 and accounting for 34 per cent of the overall fee pool.  Fees from equity capital markets underwriting recorded $81.5 million, marking the strongest first nine months for fees in the region since 2008. 

RBS topped the Middle Eastern completed M&A fee rankings for the first nine months of 2012, earning 12.2 per cent of the fee pool. Qatar National Bank topped the Middle Eastern ECM fee rankings with $16 million, followed closely by Saudi Fransi Capital with $15.9 million.

Deutsche Bank and Saudi British Bank topped the debt capital markets and syndicated lending fee league tables, respectively. 

In respect to M&A activity, Goldman Sachs topped the Middle Eastern Involvement M&A Ranking during the first nine months of 2012 with $5.9 billion, while Credit Suisse took second place with $4.8 billion.

HSBC topped the Middle Eastern target M&A Ranking, controlling 26 per cent of the market. The largest Middle Eastern deal so far this year was Qtel’s $2.2 billion offer for the Kuwait-based telecommunications operator, Wataniya, in August. 

Equity capital markets issuance reached $2.5 billion during the third quarter of 2012, down 39 per cent from the previous quarter. ECM activity during the first 9 months of 2012 totaled $7.5 billion, down 16 per cent from the same period last year. Follow-ons accounted for 76 per cent of ECM activity during the first nine months of 2012, while IPOs accounted for 22 per cent. 

The largest Middle Eastern ECM transaction during the third quarter was a $1.6 billion a follow-on from Mobile Telecommunications Co Saudi Arabia. Bolstered by this deal, and Qtel’s $1.9 billion follow-on in May, Telecoms was the most active sector in the Middle East during the first nine months of 2012 with 42 per cent. Qatar National Bank topped the Middle Eastern Equity Capital Markets ranking during the first nine months of 2012. 

Middle Eastern debt issuance reached $6.3 billion during the third quarter of 2012, a 6 per cent decline from the second quarter total of $6.7 billion. t took activity during the first nine months of 2012 to $23.9 billion, up 52 per cent on the same period in 2011. 

Investment grade corporate debt accounted for 70 per cent of all Middle Eastern DCM activity during the third quarter. HSBC took the top spot in the Middle Eastern bond ranking for the first nine months of 2012 with a 14 per cent share of the market.

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