M&A deal value in MENA spikes in H1 2019, says new report

BY Fraser Tennant

Deal value in the Middle East and North Africa (MENA) region increased by 220.8 percent to $115.5bn in H1 2019 – up from $36bn in H1 2018 – according to a new EY report.

In its ‘H1 MENA M&A’ report, EY reveals that, while deal value increased significantly. deal volume witnessed a decrease of 10.7 percent, with 216 announced deals in H1 2019, down from 242 deals recorded in H1 2018.

Among the key deals in H1 2019 was Uber’s acquisition of Careem Networks for $3.1bn, the largest technology sector transaction to date in the Middle East, as home-grown technology start-ups find themselves being pursued by global players. The largest deal during H1 2019 was Saudi Aramco’s acquisition of a 70 percent stake in SABIC worth $69.1bn from PIF.

“MENA corporates are finding innovative ways to raise capital and have stepped up the frequency of their portfolio reviews,” said Matthew Benson, MENA transaction advisory services leader at EY. “Companies are reviewing their portfolios every quarter or more frequently – more often than global executives. With more frequent portfolio reviews, several non-core businesses are set aside for divestment thereby fuelling deal activity.”

In terms of domestic M&A activity, deal value in H1 2019 was driven by mega deals, with 111 deals amounting to $79.3bn, compared with 96 deals amounting to $5.5bn in H1 2018. In comparison, MENA witnessed 65 outbound M&A deals worth $21bn, compared with 77 deals worth $18.2bn in H1 2018.

As far as inbound investment is concerned, H1 2019 witnessed a fall in M&A deal volume in the MENA region, with 40 deals amounting to $15.1bn, compared with 69 deals valued at $12.3bn in H1 2018. The United Arab Emirates (UAE) was ranked the highest in terms of inbound M&A investment in the region, with 20 deals amounting to $14.4bn.

The EY report also reveals that the oil & gas sector was the top target sector for inbound activity, accounting for $10.8bn. Furthermore, four out of the six inbound deals in the sector were in the UAE, including three mega deals.

“Large sums of inbound M&A reinforce the MENA investment thesis,” said Anil Menon, MENA M&A and equity capital markets leader at EY. “We continue to believe that these are good times for strategic acquisitions in MENA.”

Report: EY H1 MENA M&A

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