MENA M&A deal value increases by 69% in 2018: report

The Middle East and North Africa (MENA) region experienced a significant spike in deal value, reaching $26.76 billion in 2018, as compared to $15.86 billion in 2017 – an increase of 68.7%.

The significant growth in deal value was driven by increased deal-making in the UAE, which more than doubled to $10.4 billion in 2018, as well as blockbuster deals in Saudi Arabia and North Africa, revealed a research by Mergermarket, a global provider of M&A data intelligence.

Abu Dhabi National Oil Company (ADNOC) played an important role with a series of seven divestments on its energy assets worth $6.2 billion. Meanwhile, deal count in the region jumped by 15 deals to 148, compared to 133 in 2017.

The first half of 2018 saw a considerable rise in value to $15.16 billion from $9.13 billion in 2017, and a moderate increase in the number of deals, to 87 from 71. By contrast, the second half of the year was more subdued with 61 deals totalling $11.59 billion, due to macro-economic and geopolitical headwinds, the report stated.

Cross-border MENA deals, which totalled 77 deals worth $14.21 billion, saw the highest volume of inbound merger and acquisition (M&A) on record and the highest value since the global financial crisis.

Domestic M&A ($12.54 billion) was considerably higher than in 2017 ($8.742 billion), although deal count was marginally lower. The increase in domestic activity was driven by two sizeable deals in Saudi Arabia, including Saudi British Bank and Alawwal Bank's $4.7 billion tie-up and Saudi International Petrochemical’s $2 billion acquisition of Sahara Petrochemical.

“Despite unprecedented global levels of fundraising and sky-high values seen elsewhere, private equity investments in MENA remained low. Nonetheless, buyout deal value in 2018 ($1.186 billion) increased considerably, compared to 2017 when there were just 12 deals worth $264 million,” the report said.