Finance & Capital Market

Mena M&A deals top $70bn in 2020: Refinitiv

The value of announced M&A transactions with Mena involvement reached $70.3 billion during 2020,making the year the fourth highest annual total of all time, despite falling 47% in value from the record high achieved last year, a report said.

About $52.0 billion worth of target M&A deals were announced from 550 deals, making it the second-highest year in deal value, said Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, in its investment banking analysis for 2020.

Inbound M&A in Mena saw a record year of $24.1 billion in deal volume and 260 deals announced, a 41% increase in deal volume and 64% increase in number of deals from 2019. Despite the records, domestic M&A registered a 69% decline from 2019 to $27.9 billion, largely due to the Aramco/Sabic deal. Outbound M&A also declined by 32% to $10.3 billion.

The financial sector was most active in 2020, with deals targeting financial companies accounting for 39% of total M&A in Mena, followed by Energy & Power with 26%. The United Arab Emirates was the most targeted nation, followed by Saudi Arabia and Egypt.

Morgan Stanley topped the any Mena involvement announced M&A financial advisor league table with 37% market share and Mena Target M&A league table with 49% market share in 2020.

Mena Investment banking fees recorded $ 1.2 billion in 2020

According to the report, investment banking fees generated in Mena reached an estimated $1.2 billion during the full year of 2020, down 12% from 2019 and representing the fourth-highest total since our records began in 2000.

A total of $441.2 million worth of advisory fees were earned from completed M&A transactions throughout 2020, up 12% from 2019 and the second-highest year in fees since 2000, second only to 2007 with $447.3 million.

Debt capital markets saw an increase in fees reaching a record $282.3 million, up 10% compared to 2019. This represents the highest annual fees total since our records began in 2000. Meanwhile, equity capital market underwriting fees declined 61% to $86.9 million, marking the lowest full-year equity fees total since 2016. Syndicated loans also fell 8% to a three-year low of $410.4 million.

Government and Agencies contributed the most fees with $450.7 million, representing 37% of total fees, up from 22% in 2019. The UAE along with Saudi Arabia represented two-thirds of Investment banking fees in Mena generating $433.9 million and $382.9 million, respectively. HSBC earned the most investment banking fees in Mena during 2020, a total of $104.8 million or an 8.6% share of the total fee pool.

Equity capital markets

Mena equity and equity-related issuance totalled $4.6 billion in 2020, down 86% from 2019 and a four year low in ECM proceeds. The largest ECM issuance in Mena was the $1.2 billion follow on from Mobile Telecommunications Co Saudi in October 2020.

The largest IPO of 2020 in Mena was the IPO of Dr Sulaiman Al-Habib Med Svcs raising $699.7 million in proceeds. The Energy sector was the best forming sector with $1 billion in equity proceeds. Citi Bank takes the top spot in the Mena ECM league table in 2020 with a 15% market share, closely followed by First Abu Dhabi Bank PJSC with 14%.

Debt capital markets

Mena debt issuance reached record levels of $120.7 billion in 2020, up 15% from 2019 and the highest total on record. Investment Grade issuance also reached its highest total in 2020 with $60.2 billion generated in proceeds. The largest DCM issuance in 2020 was from the Ministry of Finance Qatar in April, with $10.0 billion in proceeds.

The UAE and Saudi Arabia were the most active issuer nations during 2020 with $40.6 billion and $31.4 billion in bond proceeds, respectively. Governments and Agencies was the top-performing industry with the highest bond proceeds throughout 2020. Standard Chartered PLC took the top spot in the Mena bond underwriter rankings in 2020 with $21.4 billion of related proceeds or an 18% market share. – TradeArabia News Service