Mena region records deals worth $15.4Bn
The Mena region saw 93 deals in the first quarter of 2018, the Ernst and Young’s first quarter 2018 M&A report said.
Times News Service
MUSCAT: Merger and acquisition (M&A) activity in the Mena region recorded 93 announced deals in the first quarter of 2018, a decline of 21.8 per cent compared to 119 deals in the first quarter of 2017, according to a new report.
The Ernst and Young’s (EY’s) first quarter 2018 M&A report said that the total disclosed deal value in Mena also dropped by 26.7 per cent in the first quarter of 2018 to US$15.4 billion, compared to $21 billion in the first quarter of 2017. Of the transactions across the Mena region, the United Arab Emirates saw the highest deal value with $5.1 billion from 23 deals announced in the first quarter of this year.
The first quarter of 2018 saw inbound deal activity and value increase; however, both deal activity and value declined for outbound and domestic transactions. The announced number of inbound deals was 27, up by 42.1 per cent from the 19 deals announced in the first quarter of 2017. The inbound deal value increased by 138.7 per cent to $7.4 billion in the first quarter of 2018, up from $3.1 billion in the first quarter of 2017.
The number of outbound deals fell from 41 deals in the first quarter of 2017 to 29 deals in the first quarter of 2018, while the outbound deal value fell by 63.8 per cent. The Mena region also saw a decline in domestic deals as they fell from 59 announced deals in the first quarter of 2017 to 37 deals in the first quarter of 2018, with the domestic deal value falling by 28.2 per cent.
“Confidence in the economy remains strong, though Mena companies are taking a pause as rising inflation, market volatility, and high deal valuations have businesses looking to preserve capital rather than deploy it in the short term,” Phil Gandier, MENA Transaction Advisory Services Leader, EY, said. “In particular, companies in Saudi Arabia and Egypt are taking a wait-and-see approach. Last year, UAE companies dominated both inbound and outbound M&A activity and we expect the UAE to continue driving Mena deals in 2018,” he added.
The sector with the highest deal value in the first quarter of 2018 was oil and gas, with an amount reaching $7.2 billion. The chemicals sector followed, with a deal value of $2.5 billion and the insurance sector had the third highest deal value at $1.2 billion. Rounding out the top five sectors by deal value in the first quarter of 2018 were provider care and technology, both with deal values of $1 billion.
“Although the deal volume has been modest in the first quarter of 2018, deal values relating to acquisition capital deployed in Mena in the first quarter of 2018 have reached their highest levels since 2001, with $10.2 billion invested in the region. The insurance, medical and education sectors have seen the highest allocation of acquisition capital,” Gandier said.