Most active M&As market - UAE

The UAE would be the most active merger and acquisition market this year, according to the latest survey results released on Wednesday.

DLA Piper, a global law firm, revealed the results of the second half of its survey of business leaders in the Middle East. Focusing on M&A activity specifically, the respondents identified areas of opportunity - both geographical and sector-specific - in the Middle East and what factors are needed to ensure an healthy economic environment.

When asked which countries in the Middle East they believed would have an active M&A sector in 2012, almost three-quarters (71 per cent) said the UAE.

Encouragingly, more than half also felt that Saudi Arabia (68 per cent) and Qatar (56 per cent) would see M&A activity this year.

The sector most business leaders believe will offer the greatest M&A opportunities in 2012 is the Financial Services/Insurance sector (47 per cent), this was very closely followed by the Real Estate/Construction sector (46 per cent), but the Hospitality and Leisure/Tourism sector was also a popular response with 41 per cent.

The increased availability of bank lending is regarded as being the type of finance of the most potential benefit to the Middle East according to 56 per cent of respondents, while 42 per cent felt that the increased availability of private equity would help.

However, barriers to M&A activity were cited and the most common in the region is seen to be political instability (59 per cent), with the Eurozone crisis and insufficient regulatory/legal systems also seen as potential obstacles for M&A (44 per cent each).  Equally when asked what factors would most improve economic conditions in the Middle East political stability and more - and better legislation and regulation - were cited as the main catalysts by quite some margin.

Abdul Aziz Al Yaqout, Regional Managing Partner, DLA Piper Middle East, said: "You only have to look at the numbers to see how strongly the business community feels about the potential for M&A activity in 2012.  Some people may not be surprised by the presence of the UAE, Saudi Arabia and Qatar in the top three for having an active M&A sector, but Egypt and Libya have respectable numbers behind them after a difficult 2011 for both countries.  No one is saying 2012 is going to be an easy year, there are clearly still some obstacles we need to overcome as a region, but business leaders are saying the opportunities are there - and not just in the GCC."

This report is based on data from 90 online interviews with DLA Piper's regional database. The research was carried out during January 2012.