Middle East M&A deal value surges 707% in August

The value of deals targeting companies based in the Middle East leapt to $6.8 billion million in August, the highest it has been since September 2008.

The figure is a significant increase of 160 per cent on the $2.6 billion recorded last month and an even more impressive 707 per cent surge compared with the same time last year, when just $841 million was achieved, according to the latest M&A report from Zephyr, the M&A database published by Bureau van Dijk.

That brings the value of total deals targeting companies based in the Middle East to $18.9 billion in the first eight months of the year, a 71 per cent increase compared with $11 billion during the same period last year, and even more than the $14.1 billion clocked during the whole of 2011, according to Zephyr data.

By contrast, volume fell to its lowest point since February, slipping 38 per cent month-on-month from 26 to 16 transactions and just over half the 30 deals recorded in August 2011, which suggests that the value of individual transactions was higher in the period under review.

Qatar, the world’s leading gas exporter, dominated the M&A landscape in August. Qatar Petroleum’s decision to reduce its stake in conglomerate Industries Qatar marked the biggest transaction of the month, with an estimated value of $3.9 billion, more than half the total for the region. The vendor sold just over 104 million shares, representing a 19 per cent stake in the Qatari group to domestic pension fund General Retirement and Social Insurance Authority.

The second-highest value deal of the period – weighing in at $2.2 billion – was Qatar Telecom’s takeover bid for the remaining 47 per cent of Kuwait’s National Mobile Telecommunications Company, also known as Wataniya. QTel offered the Wataniya stockholders KWD2.60 per share, an 18 per cent premium on the last closing price on the day of the transaction (August 16).

The combined values of these two deals accounted for 90 per cent of the total value for the Middle East. While the majority of M&A activity was inter-regional, three featured outside investors from the UK, Singapore and US.

The value of deals targeting companies based in Qatar was $3.9 billion, one of its best results in recent years, and due entirely to the Industries Qatar deal. Kuwait was second with $2.6 billion, again one of its most impressive results, and largely down to the Wataniya takeover. The UAE came third with $224 million, a big improvement on the $4 million achieved last month, and Jordan was fourth at $37 million, a drop of 74 per cent on July’s total of $141 million.

By volume, UAE and Jordan each had 5 transactions signed off in August, Kuwait 4 and Saudi Arabia and Qatar one deal each.

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