Value of Middle East deals fall by 40% in first quarter

Muscat: A total of 13 mergers & acquisitions (M&A) deals were announced in Middle East and North African (Mena) region in the first quarter of 2016 valued at $1.5 billion, according to Mergermarket, the world’s leading news and intelligence service for M&A.
Number of deals is the same as in the first quarter of 2015, but total deal value has declined by 39.7 per cent from $ 2.5 billion, indicates the roundup of Mena M&A activity in the first quarter of 2016, ahead of its Middle Eastern M&A and Private Equity Forum, to be held in Dubai on May 16.
Mergermarket identifies the telecommunications sector as the most targeted in the Middle East, entirely as a result of Saudi Telecom Company’s $494 million acquisition of Kuwait Telecommunications – the highest valued deal of the quarter.
Kirsty Wilson, global research editor at Mergermarket, commented: “The UAE attracted the highest number of deals during the quarter, with the announcement of seven deals totalling $447 million. The highest valued UAE deal of the quarter was the $292 million acquisition of e-commerce platform Souq.com by Standard Chartered Private Equity limited, Baillie Gifford and International Finance Corporation, in a funding round that valued the company at $1 billion.”
Deal value in the telecommunications sector grew significantly, totalling $494 million in the first quarter of 2016, compared to $223 million in the same period last year. Other sectors that experienced considerable growth were construction, which recorded $135 million in the first quarter compared to $41 million for the same period in 2015, and transport, with deal value totalling $90 million in the first quarter, compared to $ 21 million in the same period last year.
Will Seivewright, corporate/M&A partner at Baker & McKenzie Habib Al Mulla, based in the UAE, commented: “Cross-border M&A in the first quarter of 2016 has continued to be very busy across the Middle East, following a record-breaking 2015 for cross-border M&A globally and regionally. The food and beverage and telecommunications sectors have been particularly active across the GCC, and notwithstanding the low oil prices and macroeconomic uncertainty, companies have continued their strategic expansion and/or consolidation plans.”
“The region remains attractive to cash rich international private equity investors and given the current healthy pipeline of both M&A and private equity related deal activity, we expect this trend to continue into the next quarter,” he added.
Mergermarket’s upcoming Middle Eastern M&A and Private Equity Forum will be attended by leading Mena transaction professionals, who will examine deal trends in the region as well as share ideas on the outlook for M&A in the Middle East.
The forum will be hosted in strategic partnership with Baker & McKenzie, EY, Standard Bank and Instinctif Partners. The Forum will be followed by Mergermarket’s inaugural Middle Eastern M&A Awards, which will recognise transaction advisory achievements across a range of sectors including consumer, mining and utilities, industrials and chemicals, medical and biotech, real estate, and financial services.