MENA drops 57.6% in value of M&A

The value of mergers and acquisitions in the Middle East and North Africa region declined by 57.6 per cent in 2017, despite the deal count maintaining almost the same level as the previous year, according to Mergermarket, a provider of M&A data and intelligence.

For full year 2017, 126 deals worth approximately $16 billion (Dh58.76 billion) were recorded compared to 129 deals with a total deal value of $37.8 billion in 2016.

The top performing sectors for M&A in the region included Financial Services with 16 deals at a total value of $4.5 billion, Industrials & Chemicals with 13 deals valued at over $3.9 billion, and Telecommunications with seven deals valued at over $3.2 billion.

The most significant deals in these sectors included the $2.2 billion deal between Tronox and The National Titanium Dioxide Company, Kingdom Holding Company’s $1.5 billion investment into Banque Saudi Fransi and the 12.1 per cent stake acquired in Mobile Telecommunications Company by Oman Telecommunications Company for $1.4 billion.

The worst performing M&A sectors in the MENA region included construction, with deal value falling from $1.3 billion in 2016 to just $59 million in 2017, despite consistent deal count.

“The M&A market in MENA is showing real signs of strength in 2018, with a flurry of big-ticket deals already announced this year. Greater stability in commodity markets and a need to innovate should put corporates in a position to be active throughout 2018,” said Jonathan Klonowski, EMEA Research Editor at Mergermarket.

Deal activity is expected to pick up pace this year as low oil prices continues to push companies towards M&A to gain market share. Tech disruption across a number of sectors are also leading to consolidation and acquisitions. Mergermarket’s upcoming MENA Mergers 2018, on April 9 in Dubai will discuss the emerging trends in M&A, private equity and corporate restructuring space.