Middle East merger and acquisitions hit $43.4b in 2013

Middle Eastern investment banking fees, during 2013, reached $722.2 million.

By Staff Report

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Published: Mon 20 Jan 2014, 11:05 AM

Last updated: Fri 3 Apr 2015, 5:08 PM

The value of announced merger and acquisitions (M&A) transactions with any Middle Eastern involvement reached $43.4 billion during 2013, seven per cent more than the $40.7 billion witnessed in the region during 2012, Thomson Reuters’ full year investment banking analysis for the Middle East region revealed.

According to the report, Middle Eastern investment banking fees, during 2013, reached $722.2 million.

Nadim Najjar, MD for the Middle East, Africa, and Russia/CIS regions at Thomson Reuters, said: “Middle Eastern companies raised $4.2 billion of equity during 2013, a 39 per cent decline from 2012 ($6.9 billion), while Middle Eastern debt issuance reached $8.1 billion during the fourth quarter of 2013, up 82 per cent from the previous quarter. Despite the quarterly uptick, only one-third of 2013 activity was seen during the second half of the year.”

Najjar pointed out that the investment banking fees increased by 20 per cent over the $602.6 million seen during 2012, recording the highest annual total in the region since 2010.

He added: “Investment banking fees from completed M&A transactions totalled $212.8 million, up 22 per cent from 2012 ($174.0 million), and accounting for 29 per cent of the overall fee pool. Fees from debt capital markets underwriting hit $144.1 million, up 44 per cent from $100 million during the previous year, and marking the best annual total for DCM fees in the Middle East since 2010. Equity capital markets underwriting fees totalled $62.4 million, down 43 per cent from 2012 ($108.9 million) and the lowest annual total since 2003. Investment banking fees from syndicated lending increased 38 per cent to $303 million, accounting for 42 per cent of total Middle Eastern fees, the highest share since 2004.”

Najjar also noted that HSBC earned the most investment banking fees in the Middle East during 2013, a total of $61.6 million for an 8.5 per cent share of the total fee pool. HSBC topped the Middle Eastern completed M&A fee league table, as well as both the DCM and loans underwriting fee rankings. The National Bank of Abu Dhabi took first place in the Middle Eastern ECM fee ranking with a 10.3 per cent cut.

“Bolstered by the $7.5 billion merger of two UAE state-owned aluminium producers in June, the materials sector was the most targeted, accounting for 23 per cent of activity. Energy and power and telecom deals also helped drive activity during 2013, with each sector accounting for 21 per cent of Middle Eastern involvement M&A,” Najjar said.

In the area of equity capital markets, he pointed out that Middle Eastern companies raised $4.2 billion during 2013, a 39 per cent decline from 2012 ($6.9 billion), led by an 80 per cent drop in follow-on offerings.

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