MENA registers record period for mergers and acquisitions

$30.5 billion of deals struck in the first half of 2017, research shows
MENA registers record period for mergers and acquisitions
By Sarah Townsend
Thu 04 May 2017 11:59 AM

The first half of 2016 was a record period for mergers and acquisitions (M&As) in the the Middle East and North Africa (MENA), according to a new report.

A total of $30.5 billion of deals were struck – the highest volume over a six-month period since 2013, said A.T. Kearney’s 2017 MENA M&A report.

Megadeals drove the uptick in activity with four transactions above $1 billion, stacking up to $24.2 billion, the report said.

The largest transaction was in financial services – the merger of First Gulf Bank and National Bank of Abu Dhabi worth $14.8 billion and creating the UAE’s largest bank with assets of around $178 billion.

The remaining megadeals were in shipping, and interest acquisitions in oil and gas companies.

The report said: “The opportunity to acquire assets with attractive valuation enabling access to the region’s long-term growth potential is compelling for international corporate investors.

“We witnessed this trend in the second half of 2016 with corporations enhancing their participation in the overall MENA M&A market.”

In particular, investors are using active portfolio management to maximize the value of their investments – albeit at a slower pace compared with the previous four periods, A.T. Kearney added.

Divestments abroad dropped 38 percent in the second half of 2016 compared with the first half of the year, reaching 10 transactions, while divestment value dropped 63 percent to $1 billion in transactions.

The report said M&A activity is expected to remain dynamic this year “as market players continue initiatives to enhance competitiveness”. Investors are expected to focus on transactions with scale and impact, it said.

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