Wednesday 28 September 2022

Nadim Najjar

Mena M&A deal value hits record $13.9bn in Q1

DUBAI, April 12, 2018

The value of announced merger and acquisition (M&A) transactions with any Mena involvement reached $13.9 billion during Q1 2018, 7 per cent more than the value recorded during Q1 2017 and a 3-year high, said an industry expert.

“Deals with a Mena target reached an 8-year high rising to $11.2 billion, up 50 per cent from the same period in 2017 while inter-Mena or domestic deals reached a 5-year high, also up 42 per cent from year-on-year,” added Nadim Najjar, managing director, Mena, Thomson Reuters, a leading source of intelligent information for businesses and professionals.

Najjar was commenting on the 2018 Q1 investment banking analysis for the Middle East released by Thomson Reuters.

According to Thomson Reuters, Middle Eastern & North African investment banking fees totalled an estimated $243.1 million during Q1 2018, 6 per cent less than the value of fees recorded during Q1 2017.

“Debt capital markets underwriting fees totalled $62.9 million. Despite being down 18 per cent year-on-year, this was the second highest start of the year in the region since our records began in 2000,” said Najjar.

Equity capital markets fees decreased 46 per cent to $8.4 million, while fees generated from completed M&A transactions totalled $15.1 million, an 82 per cent decrease from last year and the lowest annual start since 2004. Syndicated lending fees reached a record high of $156.6 million, up 87 per cent from Q1 2017.

Debt capital markets fees accounted for 26 per cent of the overall Mena investment banking fee pool. Syndicated lending fees accounted for 64 per cent, the highest share of the regional fee pool since our records began in 2000. On the other hand, the share of completed M&A advisory fees fell to its lowest level, only accounting for 6 per cent of the market. Equity capital markets underwriting fees accounted for 3 per cent, the lowest since 2011.  

Standard Chartered earned the most investment banking fees in Mena during Q1 2018, a total of $25.8 million for a 10.6 per cent share of the total fee pool; also leading in the DCM underwriting league table. Moelis & Co topped the completed M&A fee rankings with 23.2 per cent of advisory fees, while ECM underwriting was led by Al Rajhi Banking & Investment with $3.1 million in ECM fees, or a 19.1 per cent share. HSBC took the top spot in the Middle Eastern syndicated loans fee ranking.

Driven by Total SA’s acquisition of 20 per cent of Umm Shaif and Nasr concession of Emirati state-owned Abu Dhabi National Oil Co for $1.1 billion, Mena inbound M&A currently stands at an all-time high. At the same time, outbound M&A decreased from $3.3 billion in Q1 2017 to $779 million so far this year.

Energy & Power deals accounted for 54 per cent of Mena involvement M&A by value and despite having the same number of transactions as the financial sector, the latter only accounts for 10.7 per cent of the region's M&A activity. Goldman Sachs currently leads the Q1 2018 announced any Mena involvement M&A league table. Rothschild and Morgan Stanley follow in second and third place.

Mena equity and equity-related issuance totalled $1.4 billion during Q1 2018, a 158 per cent increase year-on-year. Out of the 6 transactions announced so far this year, 5 have been follow-on offerings, raising a total of $1.3 billion and accounting for 92 per cent of the quarter's ECM activity in the region. Orange Egypt follow-on raised $866 million and stands out as the biggest deal for Q1 2018. EFG Hermes leads the Mena ECM ranking with a 63.4 per cent market share.

Despite showing a 25 per cent decrease compared to Q1 2017, debt issuance in the Mena region is at its second highest level since our records began, reaching $23.9 billion so far this year. The UAE was the most active nation in the region accounting for 33.3 per cent of activity by value, followed by Oman with 29 per cent. International Islamic debt issuance increased 9 per cent from Q1 2017 to reach $13.6 billion so far during 2018.  

Standard Chartered currently leads in the Mena bond ranking for Q1 2018 with a 16 per cent share of the market, while CIMB Group Holdings took the top spot for Islamic DCM issuance with a 15 per cent share. – TradeArabia News Service

Tags: Standard Chartered | merger | acquisition | Thomson Reuters |

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