Riyadh – Mubasher: Mergermarket announced that M&A deal value targeting the Middle East surged 238.1% to 55 deals worth $26.6 billion year-to-date, compared to 54 deals worth $7.9 billion in the same period of 2015.
"Deal value was highly influenced by the largest transaction in the region so far this year - National Bank of Abu Dhabi PJSC’s (NBAD) $14.8 billion acquisition of UAE-based First Gulf Bank (FGB) - accounting for 55.6% of the Middle East’s total M&A value, and pushing the Financial Services sector to the top of the industry rankings (six deals totalling $15.5 billion)," Mergermarket reported.
The deal will come into effect in the first quarter of 2017 through a share swap with FGB shareholders receiving 1.254 NBAD shares for each FGB share they hold; after that, FGB will be delisted from the Abu Dhabi Securities Exchange.
Even without taking this deal into account, Middle Eastern M&A activity (54 deals, $ 11.8 billion) would still have registered a 49.5% value increase year-on-year.
Deal-making in energy, mining and utilities dropped to 5.4%, $1.4 billion year-to-date from 60.1%, $4.7 billion in 2015, while the transport and consumer sectors saw increased deal values compared to the previous year.
This trend was driven by German-based Hapag-Lloyd AG’s acquisition of United Arab Shipping Company SAG for $5.4 billion, which helped boost the Transport sector’s share to 20.6% ($5.5 billion). Nine deals in the Consumer sector contributed to a total value of $3.5 billion, up from just $175 million in 2015, the statement said.
“Despite the drop in M&A in the historically strong Energy sector due to current political uncertainties in the region and relatively low oil prices, the deal pipeline looks strong going into the end of the year,” Ruth McKee Al Ghamdi, Head of MENA at Mergermarket, commented.
Al Ghamdi added that there are early indications that deal-making for the year will end stronger than in 2015, in part due to a couple of large transactions.
