M&A deal value hits $116 bln in MENA in H1 2019: report

The value of announced deals in the Middle East and North Africa (MENA) region increased by 220  percent year-on-year to $115.5 billion in the first half of 2019 from $36 billion, according to a report by consultancy firm EY.

Deal volume, however, fell 10.7 percent, with 216 announced deals, down from 242 deals.

The largest deal was state-owned Saudi Aramco agreeing to acquire a 70 percent stake in Saudi Basic Industries Corporation (SABIC), worth $69.1 billion, from the Public Investment Fund.

Meanwhile, state-owned entities were involved in 55 deals (25 percent of total deals) amounting to $104.5 billion, including mega deals involving Saudi Aramco, ADNOC and Abu Dhabi Investment Authority (ADIA).

Top five target sectors 

In H1 2019, the chemicals sector saw the highest deal value with $69.3 billion due to the landmark Saudi Aramco–SABIC deal, followed by the oil and gas sector with $14.2 billion, the report said.

The provider care sector recorded $10.3 billion, the banking and capital markets sector registered $5.1 billion in deal value, followed by the technology sector, which logged a deal value of $4.3 billion, which included Uber’s $3.1 billion acquisition of Careem Networks.

Domestic deal value 

The first half saw an increase in domestic M&A activity in terms of deal value, with 111 deals amounting to $79.3 billion, compared with 96 deals amounting to $5.5 billion in H1 2018.  

In addition, MENA witnessed 65 outbound M&A deals amounting to $21.0 billion compared with 77 deals amounting to $18.2 billion in H1 2018. 

Strategic investments by sovereign wealth funds and state-owned enterprises, including mega deals by ADIA and Saudi Aramco, drove the MENA outbound activity, the report said.