Mena region’s M&A deals rise in value by 11% in first quarter of this year

Merger and acquisitions in the Mena region grew by 11 per cent to $21 billion in the first quarter of this year, according to data provider Refinitiv.

Deals valued at under $500 million totalled $4.6bn this year, marking the strongest start to a year since records began in 1980. The UAE was the most active in terms of its deal-making activity, which rose 5 per cent to $4.3bn in the first quarter, accounting for about half of all activity in the region.

“The largest Mena target M&A deal of the year so far is UAE’s hospital operator NMC Healthcare’s $2.25bn sale to its creditors,” Refinitiv said in a report.

Health care was the most active sector in the Mena region, with $2.3bn in deal activity, equal to a quarter of this year’s M&A activity, it said.

The region has recorded strong M&A activity since last year as the pace of economic growth picks up on the loosening of Covid-19 restrictions.

The volume of M&A deals in the Mena region surged 66 per cent last year, according to a report by EY. There were 661 transactions worth $99bn last year, compared with 397 deals worth $85.2bn in 2020, the consultancy said.

The UAE experienced the highest deal activity in terms of volume, with 303 transactions, while Saudi Arabia attracted the most M&A capital, worth $47.4bn.

Mena economies are expected to grow by 5.2 per cent this year, the fastest rate since 2016, on higher oil prices, according to a recent World Bank report.

However, the recovery is expected to be uneven, with crude exporters benefitting the most from the current oil price rally.

Inbound M&A fell by 42 per cent to $1.9bn in the first quarter of this year while outbound M&A doubled from last year to $8.8bn, Refinitiv said.

Meanwhile, equity capital markets in the Mena region raised $3.7bn from 15 offerings in the first quarter, up seven times on an annual basis. It is the strongest start to the year for equity capital markets since 2008.

Initial public offerings “made up most of the total, with 13 out of 15 ECM deals coming from an IPO”, the report said.

Saudi Arabia was the most active nation, with $3.5bn in proceeds, followed by Egypt, with $163.3m. The largest listing in theMena region was Nahdi Medical’s IPO, which raised $1.3bn.

Investment banking fees in the region increased by 94 per cent to $430m, making the total for this year the highest since records began in 2000. Completed M&A fees also rose by 569 per cent to a record $184m, accounting for 43 per cent of the investment banking fee pool.

Governments and agencies contributed to more than half of the fees earned in Mena, the report said. JP Morgan earned $42.8m, the highest amount of investment banking fees in the first quarter in the region, and accounted for a 10 per cent share of the market. Goldman Sachs and Moelis took second and third spots with a market share of 7.6 per cent and 6.2 per cent, respectively.

Debt capital markets slid 79 per cent in the region to $7.9bn during the period. The UAE was ranked at the top for debt capital market activity, with $5.3bn in related proceeds, followed by Saudi Arabia, with $1bn.

The largest bond offering of the year was from MDGH GMTN, wholly owned by Mubadala Treasury Holdings Company, which raised $1.4bn.

“HSBC Holdings takes the top spot in the Mena debt capital markets league table, with $935m in related activity or a 12 per cent market share. First Abu Dhabi Bank comes second, with a 9 per cent market share,” the report said.

The UAE was the most active in terms of its deal-making activity, which rose 5 per cent to $4.3 billion