MENA M&A Market Prolonging Recovery

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Bureau van Dijk and MENA Research Partners report on regional M&A activity until 3Q2014.

bvdinfo.com

Despite some good performances by individual countries in Q3 the MENA region’s results were disappointing, particularly when compared to global values, which increased on Q2 although volume declined.

Despite pausing in the past 3rd quarter, the MENA M&A market prolonged, during the first 9 months of the year 2014 (9m14), its recovery path initiated post-financial crisis and in the aftermath of the Arab Spring. The strengthening economic fundamentals, the amelioration in the risk profile of major regional countries and the governmental implementation of key business-friendly reforms are all stimulating factors for deal generation activity.

While the total number of completed deals has been stabilizing at the low-end of its range since 2009, the announced value of M&As reached $40 billion and $32 billion respectively during 9m13 and 9m14, compared to a slightly lower 9-month average of $27 billion during the previous 3 years. Such trend is gradually reinstating the large deal sizes witnessed during the pre-2008 years.

From a geographic perspective, deal activity remains driven by a strong performance in GCC coupled with an ongoing pick-up in selected Arab Spring countries like Egypt and Morocco. GCC accounted for 44% and 43% respectively of the announced value and volume of completed deals during 9m2014. This is, however, compared to 79% and 42% respectively during 9m2013, an indication of larger deals being closed outside the Arabian Gulf countries.

Lisa Wright, Zephyr director, said: “Despite some good performances by individual countries in Q3 the MENA region’s results were disappointing, particularly when compared to global values, which increased on Q2 although volume declined. In all there were 21,531 deals worth an aggregate USD 995,017 million completed worldwide in Q3 2014, compared to 22,427 worth USD 974,075 million in Q2.”

Cyclical sectors continued to be a major focus for the acquirers. During 9m2014, sectors like banks, construction and service companies accounted for a substantial share of the regional completed M&As, prolonging the previous years’ trend.

Minority acquisitions accounted for most of the number of the regional deals during the 9m2014, widening their lead over the past years relative to majority deals. This is in line with the general perception that regional investors are less reluctant to give up control of their business.

Foreign acquirers have been one major component in the MENA M&A market. During 9m14, they have accounted for 51% of the number of completed deals, compared to 42% during 9m2013. These numbers are however lower than the 9-month average of 62% witnessed during the period 2009-2012. This reflects a growing confidence in a number of regional economies and, in return, offers interesting exit options for local investors.

For the full report, visit: http://www.mena-rp.com/pdf/MA_MENA_3Q2014.pdf

About MENA Research Partners (MRP) is a research outsourcing company offering customized business intelligence to corporations in the Middle East & North Africa (MENA). MRP services focus on economics, sectors, equities, fixed income, foreign exchange, commodities, companies, M&A and documentation services. MRP products include feasibility studies, primary and secondary market research, company valuation, white label publications, conference presentations, roadshow & pitchbook preparation, database building. MRP client base is made up of commercial banks, brokerage companies, advisory houses, private equity firms, asset managers, consulting firms, governments and private corporations.

About Bureau van Dijk (BvD) is one of the world’s leading providers of business and M&A intelligence. BvD is best known for its range of international company information products that combine multiple high-quality data sources with flexible software to allow users to manipulate data for research, marketing intelligence and analysis. BvD publishes a range of different products including Orbis, a Global database of 130 million companies and Zephyr, a Global M&A database. Bureau van Dijk is present globally through a network of 32 offices. For Middle East related inquiries please contact the Dubai office at dubai@bvdinfo.com or visit http://www.bvdinfo.com

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Leela Hauser
Bureau van Dijk
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