Mergers & Acquisitions (M&A) deal values announced in the Middle East and North Africa (MENA) region dropped by 59% to US$6.5Bn in Q1 2010 compared to deals worth US$15.8Bn announced in Q1 2009. According to Ernst & Young’s MENA M&A update, the number of announced deals dropped by 16% from 91 in Q1 2009 to 76 in Q1 of this year.
But there were improvements over the previous quarter
The total number of M&A announced deals in Q1 2010 increased by six, from 70 announced deals in Q4 2009 to 76, while announced deal value jumped by 30% from US$5Bn in Q4 2009 to US$6.5Bn in Q1 2010.
Egypt, Saudi Arabia, Qatar and Jordan are the most active
Egypt (10 deals), followed by Saudi Arabia (8 deals), Qatar and Jordan (each with 4 deals) are the key target countries for domestic deals announced in Q1 2010 in terms of the number of transactions.
In terms of total disclosed deal value in the region, Qatar attracted 39% of M&A activity with deals valued at US$1,083.5Mn, followed by Lebanon with US$450Mn and Saudi Arabia with US$381.4Mn.
Phil Gandier, Head of Transaction Advisory Services at Ernst & Young Middle East says: “The M&A activity levels in Egypt reflect the potential and great vibrancy within its economy, which will continue to be maintained in the coming quarters. Saudi Arabia was the largest recipient of M&A fund inflows with approximately 35% (US$102Mn) of total inbound deals value going to it, closely followed by Lebanon (US$100Mn) and Oman (US$49.3Mn).”
Top deals
Abu Dhabi based International Petroleum Investment Company’s acquisition of a 5.2% stake in Barclays Plc for US$1.94Bn was the largest deal in Q1 2010. The second largest deal was Barwa Real Estate Company’s acquisition of the entire share capital of Qatar Real Estate Investment Company for US$862Mn. M1/ Mikati Group’s 13.95% stake acquisition of Bank Audi SAL - Audi Saradar Group from EFG-Hermes Holding Company for US$450Mn came in third place.
Banking and real estate lead deal count
In terms of the number of announced deals, the most attractive sectors for domestic transactions in Q1 2010 include Transportation (7 deals), Asset Management (4 deals) and Chemicals (3 deals). In terms of disclosed deal value in Q1 2010, Banking & Capital markets (US$916.2Mn) was the most sought after sector in the MENA region, followed by Real Estate (US$887Mn) and Asset Management (US$383.2Mn).
“The region is traditionally known for the predominance of financial and real estate companies in M&A activity. Industrial and core sectors remain contenders for either government divestment or global expansion. Inbound investments in the MENA region were largely made in the Banking & Capital markets sector (US$100Mn) followed by Media & Entertainment (US$70Mn) and Insurance (US$49.3Mn),” concluded Phil.
