Value of MENA M&A deals hits all-time high in Q1 2019; Aramco-SABIC lead

The value of both cross border, as well as domestic mergers and acquisitions (M&A) in the MENA region reached a record-high in Q1 2019, according to data released on Wednesday by M&A data and intelligence provider Mergermarket.

The spike in MENA M&A deal value was led by Saudi Aramco’s 70 percent acquisition in Saudi Basic Industries Corp (SABIC) for $69.1 billion, and the deal between Abu Dhabi National Oil Company (ADNOC) oil pipelines, KKR, and BlackRock.

Excluding Saudi Aramco-SABIC deal, MENA M&A deals would have reached their second highest quarterly value on record, Mergermarket added.

Also read: Saudi Aramco acquires 70% majority stake in SABIC for $69 bln

“High-profile deals involving ADNOC have been key to the increase, including the sale of ADNOC Oil Pipelines to KKR and BlackRock for $4 billion, marking the firm’s largest divestment on Mergermarket record,” the report said.

The region also saw a $4 billion deal between Emirati banks Abu Dhabi Commercial Bank and Union National Bank. The move marks the second domestic banking merger in a matter of months, following the tie-up between Saudi British Bank and Alawwal Bank in October for $4.7 billion.

With the region appearing to be sheltered away from macroeconomic issues elsewhere, foreign investment has seen a noticeable uptick, bucking the global trend. A total of 22 inbound deals worth $14 billion were registered in Q1— the highest quarterly value since Q4 2007—following deals such as Uber’s acquisition of Dubai-headquartered ride hailing app Careem.

Domestic consolidation was also on the rise with a 21 domestic deals in Q1 – up from 14 in 4Q18. However, with increasing protectionist measures across much of the Western world, outbound M&A figures for Q1 2019 paint a slightly different picture.

While the value and volume (16 deals / $2.6 billion) increased from the final quarter of 2018, the figures remain relatively low compared to recent years, the report by Mergermarket added.