Mergers see highest deal value on record

A total of 22 inbound deals worth US$14 billion were registered in the first quarter, according to Mergermarket, the leading provider of M&A data and intelligence.

Times News Service

MUSCAT: The merger and acquisition (M&A) targeting Mena region in 2019 has already surpassed all annual totals following the US$70.4 billion Saudi Aramco-Sabic mega-merger, the second largest M&A deal globally so far this year.

Even excluding this deal, Middle East and North Africa (Mena) M&A would have reached its second highest quarterly value on record. The data was announced at Mergermarket’s MENA Mergers 2019 held in Dubai on April 10.

Mergermarket is the leading provider of M&A data and intelligence.

High-profile deals involving Abu Dhabi National Oil Company (Adnoc) have been key to the increase, including the sale of Adnoc Oil Pipelines to KKR and BlackRock for US$4 billion, marking the firm’s largest divestment on Mergermarket record.

The region also saw the US$4 billion deal between Emirati banks Abu Dhabi Commercial Bank and Union National Bank. The move marks the second domestic banking merger in a matter of months, following the tie-up between Saudi British Bank and Alawwal Bank in October for US$4.7 billion.

With the region appearing to be sheltered away from macroeconomic issues elsewhere, foreign investment has seen a noticeable uptick, bucking the global trend.

A total of 22 inbound deals worth US$14 billion were registered in the first quarter, following deals such as Uber’s acquisition of rival Careem Networks. Domestic consolidation was also on the rise with a 21 domestic deals in first quarter – up from 14 in 2018 fourth quarter. However, with increasing protectionist measures across much of the Western world outbound M&A figures for 2019 first quarter paint a slightly different picture. While the value and volume (16 deals, US$2.6 billion) increased from the final quarter of 2018, the figures remain relatively low compared to recent years.

Anil Menon, Mena M&A and Equity Capital Markets Leader, EY, commented: “M&A activity in 2019 is off to a solid start. We expect 2019 to be a strong year for M&A activity due to (a) consolidation plays in select sectors, (b) strategic buying by sovereigns and national oil companies, and (c) increased capital allocation in the technology sector. This combined with a more balanced bid/ask spread in terms of deal valuations is propelling M&A activity.”

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