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Fri 21 Feb 2014 10:54 AM

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MENA M&A activity rises to $50bn in 2013: study

Ernst & Young report says value of mergers and acquisitions increase by 13 % last year

MENA M&A activity rises to $50bn in 2013: study
DFM, Dubai investors, Dubai stock market, Dubai IPO

The value of mergers and acquisitions (M&A) activity in the Middle East and North Africa rose by 13 percent last year to more than $50 billion, according to Ernst & Young.

Its 2013 MENA mergers and acquisitions update said 442 deals were announced during 2013 worth $50.7 billion compared to 398 deals worth $44.8bn in 2012.

The fourth quarter of 2013 saw higher deal activity yet lower deal value compared to the same period in 2012, the report said.

Announced deal volumes increased by 11 percent from 107 deals in Q4 2012 to 119 deals in Q4 2013. Deal values declined by 40 percent from $13.3bn in Q4 2012 to US$8bn Q4 2013.

Compared to the previous quarter, announced deal values decreased from $17.5bn while announced deal activity increased by 28 percent from 93 deals to 119 deals.

Phil Gandier, MENA head of transaction advisory services, said: "Overall, 2013 was a better year for the M&A market. However, Q4 2013 fell short in terms of deal value compared to Q4 2012.

"We expect performance to continue to improve into 2014 due to the alignment of core fundamentals such as positive economic sentiment, enhanced credit availability, the imperative for growth and the expectation to create jobs."

The report said that the UAE and Qatar led regional deals with a total of seven of the top 10 deals by value in MENA in 2013.

The largest M&A deal in 2013 was the merger of Dubai Aluminum with Emirates Aluminium for $7.5bn, followed by the acquisition of Itissalat Al Maghrib (Maroc Telecom) in Morocco by Emirates Telecommunications Corporation in the UAE for $6.1bn.

Of the 442 deals announced in the MENA region in 2013, sovereign wealth funds were involved in 19 deals with announced deal value of $14.5bn - making SWFs the single largest buyer constituency in MENA contributing 29 percent of total deal value.

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