Saudi Arabia records 5 M&A deals worth $1.6 bln in Q3: EY

The value of mergers and acquisitions in the Middle East and North Africa (MENA) region rose 23 percent year-on-year (YoY) to $4.3 billion in the third quarter of 2017, with Saudi Arabia recording five deals worth $1.6 billion – highest in the region – in the three-month period, consultancy firm EY said in a recent report.

Kuwait followed with five deals valued at $ 914.8 million, and the UAE saw 21 deals amounting to $547.4 million.

The largest deal in the period, pending regulatory approvals and completion, was Kingdom Holding Co.’s (KHC) acquisition of a minority stake in Banque Saudi Fransi for $1.5 billion, the report said.

The number of deals, meanwhile, fell 10 percent YoY to 76 in Q3 2017, according to EY.

The number of domestic M&A deals rose 17 percent YoY, while it more than quadrupled in value in Q3. Also, the average size of domestic deals more than tripled compared to Q3 2016.

Inbound and outbound deals declined 21 percent YoY and 26 percent YoY, respectively.

Banking and capital markets was the top performing sector in the quarter by deal value, reaching $1.5 billion, followed by the telecom sector with a total deal value of $847 million.

“M&A will remain a vital component of MENA companies’ growth strategy in the foreseeable future, as they continue to take advantage of low interest rates and low growth environment to secure an enduring competitive edge,” said Phil Gandier, MENA Transaction Advisory Services Leader at EY.

According to the latest EY Capital Confidence Barometer survey, 65 percent of respondents indicated their intention to actively pursue deals in the next 12 months.

“MENA executives understand that they need to ‘buy’ versus ‘build’ to remain competitive,” Gandier added.