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Tue 30 Mar 2010 03:13 PM

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MENA sees 67% slump in mergers in 2009

Ernst & Young report shows value of deals in region hit $34bn, from $102bn in 2008.

The number of mergers and acquisitions in the Middle East and North Africa (MENA) fell by 67 percent last year, according to a report published on Tuesday by financial advisers Ernst and Young.

The value of deals in 2009 dropped 67 percent to $34bn, from $102bn in 2008, Ernst and Young’s annual report on the mergers and acquisitions sector said.

The report also found that the number of deals fell from 465 in 2008 to 353 in 2009, a decline of 24 percent.

While the number of outbound deals was down 42 percent from 160 in 2008 to 92 in 2009, the number of inbound deals was up six percent from 66 in 2008 to 70 deals in 2009.

The market was particularly bad in the fourth quarter of the year, in which the value of deals in the region shrank 73 percent.

“Regional and foreign acquirers are looking at regional firms for consolidation or expansion of their business during the downturn and they are looking for concessions. A clear M&A trend shows companies are moving away from half a billion dollar deals to smaller and medium-sized deals, reflecting a decline in asset values. Average deal size decreased from $351m (2008) to $189m (2009),” said Phil Gandier, head of transaction advisory services at Ernst and Young Middle East.

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