DOHA: Qatar leads the Middle East and North Africa (Mena) region with four out of the top 10 (40 percent) acquisition & merger (A&M) deals by value, followed by the UAE with 20 percent, announced in the region during the first half (H1) of 2013, according to a statement issued yesterday by the London-based Ernst & Young (EY), the world’s third largest accounting firm.
The largest sovereign wealth fund (SWF) deal was the acquisition of five percent stake in the Bharti Airtel Ltd in India by Qatar Foundation QSC for $1.26bn. The majority of SWF and private equity (PE) activity was in the telecommunications sector.
The value of disclosed inbound deals in the Mena increased from $5.1bn in first half of 2012 to 10.6bn, a rise of 108 percent, according to EY’s Mena M&A update. Whereas the outbound deal value dropped by 37 percent from $10.5bn in H1 2012 to $6.6bn in H1 2013 and domestic deal value decreased by 13 percent.
The top announced deal in H1 2013 was Baskindale Limited’s acquisition of Orascom Telecom Holding in Egypt for $6.4bn, followed by the acquisition by Sorouh Real Estate PJSC in the UAE of Aldar Properties PJSC for $2bn and Netherlands based OCI N V acquisition of Orascom Construction Industries in Egypt for $1.9bn.
Head of Transaction Advisory Services (Mena) at EY, Phil Gandier, said: “Seeing the value of inbound deals double since H1 2012 is an interesting trend, as both inbound and outbound deal flows have seen a reversal compared to a year ago, where outbound deal value was nearly double the value of inbound deals. The UAE continues to play a key role in attracting investment to the region being the target country focus of 25 percent of inbound deal volume for H1 2013. This overall positive improvement of inbound investment could signify a continued level of confidence in the Mena market irrespective of the continued political uncertainty in the region.”
Egypt saw the largest inbound deal value, representing 83 percent of all inbound deal value in H1, and has been the target country of two significant announced deals totalling $8.3bn in the telecommunication and construction sectors.
The largest volume of domestic deals was in the UAE, representing 25 percent of domestic deals in H1 2013, followed by Saudi Arabia representing 19 percent of domestic deal volume in Mena.
In Q2 2013, the value of disclosed deals dropped by 43 percent from $14.3bn in Q2 2012 to $8.1bn. However, announced deal volume increased by 20 percent from 92 deals in Q2 2012 to 110 deals in Q2 2013, the highest Q2 M&A activity since 2008.
The Peninsula
