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Tue 15 Jun 2010 12:45 PM

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Value of M&A deals in MENA falls 59% in Q1

Ernst & Young report, however, reveals upturn in activity since previous quarter.

Value of M&A deals in MENA falls 59% in Q1

Mergers and acquisitions (M&A) deal values announced in the Middle East and North Africa (MENA) region dropped by 59 percent to $6.5bn in Q1 2010 compared to the same period in 2009, Ernst & Young said on Tuesday.

According to its MENA M&A update, the number of announced deals dropped by 16 percent from 91 to 76.

However, the total number of M&A deals in Q1 2010 increased by six, compared to the previous quarter.

Deal value also jumped by 30 percent compared to the same period.

Egypt (10 deals), followed by Saudi Arabia (8 deals), Qatar and Jordan (each with 4 deals) were the key target countries for domestic deals announced in Q1 2010, Ernst & Young added.

In terms of total disclosed deal value in the region, Qatar attracted 39 percent of M&A activity with deals valued at $1.08bn, followed by Lebanon with $450m and Saudi Arabia with $381.4m.

Phil Gandier, head of Transaction Advisory Services at Ernst & Young Middle East said: “The M&A activity levels in Egypt reflect the potential and great vibrancy within its economy, which will continue to be maintained in the coming quarters.

"Saudi Arabia was the largest recipient of M&A fund inflows with approximately 35 percent ($102m) of total inbound deals value going to it, closely followed by Lebanon ($100m) and Oman ($49.3m).”

Abu Dhabi-based International Petroleum Investment Company’s acquisition of a 5.2 percent stake in Barclays for $1.94bn was the largest deal in Q1 2010.

In terms of the number of announced deals, the most attractive sectors for domestic transactions in Q1 were transportation (7 deals), asset management (4 deals) and chemicals (3 deals).

In terms of disclosed deal value in Q1 2010, banking & capital markets ($916.2m) was the most sought after sector in the MENA region, followed by real estate ($887m).

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