Mideast M&A values plunge again

Dealmaking in the Middle East took another tumble last month, with the combined value of regionally focused mergers and acquisitions (M&As) falling by a massive 82 per cent from $2.64 billion in January to just $463 million in February.

According to Bureau van Dijk’s Zephyr database, the figure is also considerably lower than the $1.18bn recorded in the year-ago period, a drop of 61 per cent.

Transaction volumes have also taken a knock, sliding 60 per cent from last month, and down 73 per cent on the same period last year. The month of February marked another low in terms of deal values and volume in the past 12 months.

The two largest deals in February were not significantly high value – just $180m and $108m, respectively – and both were share issues by Kuwait Finance and Investment Company. The first of these is a private placing with a 44 per cent stake in the business being sold; the second is a rights issue involving a 26 per cent stake.

These were followed by a $100m private equity investment by Levant Capital and Citigroup Venture Capital in Saudi Arabia-based supermarket group Al Raya for Foodstuff Company.

No financial details were released for the two UAE deals during the month – the 100 per cent acquisition of Dubai-based Flip Media by France’s Publicis Group, and a 39 per cent minority stake in the Dubai headquartered AES Oasis by Qatar Electricity and Water Company.

Kuwait leads on value thanks to two top deals

Kuwait ranked first on deal value in February, a position it last held in October 2011. Despite only two deals targeting a Kuwaiti company taking place in the month under review, they were the two highest value deals of the month and propelled the country to the top spot.

By contrast, Kuwaiti businesses attracted no investment either last month or in the year-ago period.

Saudi Arabia came second with deal value totalling $175m, a decline of 53 per cent from the $374m Saudi companies brought in during January, but an improvement on February 2011 when they received no investment at all.

Saudi Arabia also led on volume, with five deals targeting the country’s businesses compared to just two each in UAE and Kuwait.

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