M&A deals announced in MENA up by 65% in 2010

Ernst & Young report says regional uprising will have impact on 2011 deals but recovery expected
M&A deals announced in MENA up by 65% in 2010
By Andy Sambidge
Tue 22 Mar 2011 06:34 PM

The total value of merger and acquisition deals announced in the Middle East and North Africa (MENA) region grew by 65 percent last year, Ernst & Young said on Tuesday.

The deals value rose from $33.9bn in 2009 to $55.9bn in 2010, according to its MENA M&A update.

The total volume of announced M&A deals also increased from 353 deals to 402 deals, a rise of 14 percent, the report added.

Ernst & Young said that the total announced deal volume in Q4 2010 rose from $5bn to $15.6bn in Q4 2010, a rise of 212 percent.

Phil Gandier, head of Transaction Advisory Services at Ernst & Young MENA said: "The fourth quarter accounted for the greatest deal volume in 2010, recording deals that were comparable to 2008 levels. Q4 witnessed five of the top 10 deals and the highest volume of deals in 2010."

However Gandier admitted that M&A levels were expected to be affected by the unrest in the region.

"Predictably, upcoming deal activity will be affected by the developments in the region. We hope to see M&A activity pick up again once the situation stabilises," he said, adding that the financial services, manufacturing and industrials, consumer products, telecom and property sectors were likely to lead deal values in 2011.

The top deal by value announced in 2010 was the Etisalat-Zain deal, valued at $12bn, although the UAE telco has since decided not to proceed.

Next in terms of value was General Organization of Social Insurance's stake in Saudi Basic Industries Corporation, valued at $3.6bn, followed by Qatar Holding's stake in Banco Santander, valued at $2.7bn.

Of the total number of announced transactions in the MENA region in 2010, Egypt led the way with 47 deals, followed by Jordan with 31 deals, and Saudi Arabia with 30, the report said.

Ernst & Young added that the UAE was the top acquiring country in terms of volume of deals with 42 deals, which comprised 36 percent of total volume of outbound deals.

In terms of deal value from MENA, the UK ranked highest with deals worth $5.2bn, with Brazil in second place.

United States companies were the top acquirers by volume of deals in the MENA region in 2010, with 11 deals comprising 16 percent of total deal volume.

 American companies were also top acquirer in terms of value of deals in the MENA region, having acquired deals worth $1.2bn.

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