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Seivewright: UAE dominated both inbound and outbound
Middle East M&A

ME outbound M&A value hits record $17.2bn in Q2

JEDDAH, July 24, 2017

Cross-regional deals originating from the Middle East trebled from the first quarter (Q1) of 2017 to Q2, reaching $17.2 billion - the highest outbound M&A value since 2015, which was a record-breaking year for cross-regional M&A, a report said.

However, deal volume fell by 41 per cent, with only 10 deals during the same quarter, according to Baker McKenzie's Cross-Border M&A Index.

The UAE was the most active outbound investor country from the Middle East by both volume and value, with a total of six deals valued at $16.6 billion. The second and third highest bidder countries by both volume and value were Bahrain with three deals valued at $571 million and Qatar with one deal valued at $73 million.

Inbound Middle East M&A

Compared to the previous quarter, the value and volume of cross-regional M&A deals targeting the Middle East fell by 38 per cent in Q2 2017, with only five deals valued at $1.84 billion, representing a 73 per cent decrease from the same quarter last year.

The UAE was the top target country by both volume and value, with three deals across various sectors amounting to $1.07 billion. France was the top bidder country by value for Q2 2017, with ENGIE's $775 million acquisition of a 40 per cent stake in UAE-based industrial firm Tabreed.

Financial services was the top performing sector by volume and value in Q2 2017, accounting for three deals valued at $1 billion.

"Largely due to two mega transactions, the first half of 2017 has seen an impressive four-fold increase in Middle East outbound deal value compared to the same period last year, despite a much smaller number of deals," said Will Seivewright, Corporate/M&A partner at Baker McKenzie Habib Al Mulla, based in the UAE.

"While M&A deals targeting the Middle East dropped in both value and volume in Q2 2017, the overall level of cross-border and cross-regional activity that we are seeing is a promising indicator for the rest of the year."

Global M&A activity

Globally, the Index, which tracks quarterly deal activity using a baseline score of 100, decreased to 233 for Q2 2017, down 4 per cent from the prior quarter but up 15 per cent from Q2 2016. In Q2 2017, cross-border M&A made up 36 per cent and 47 per cent of global deal volume and value, respectively.

Buyers announced 1,368 cross-border deals worth $345.8 billion, a 10 per cent decrease in volume but only a 1 per cent decrease in value compared to Q1 2017. As the EU gained relative stability in the wake of Brexit developments and elections in the region, it accounted for more than half of cross-border deal value and nearly half of cross-border deal volume in Q2 2017.

North America was the most acquisitive region by deal value, announcing 364 deals valued at $128.9 billion. Following a challenging first quarter impacted by government legislation, Chinese investors returned to the deal table in Q2 2017 and were the second most acquisitive cross-border nation with 94 deals valued at $35.9 billion.

Globally, the chemicals and materials sector led by deal value in Q2 2017 with 42 deals valued at $60.4 billion, while the Industrials sector led by deal volume with 209 deals valued at $25.4 billion. Pharmaceuticals and construction were the second and third highest sectors in terms of value, contributing $40.2 billion and $36.3 billion, respectively. – TradeArabia News Service




Tags: Middle East | M&A |

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