Value of M&A transactions in Mideast hits $56b in 2015
M&A fees make up 33% of regional investment banking fee pool
Middle Eastern investment banking fees reached $636.4 million during 2015, 16 per cent less than the value recorded in 2014 and the lowest annual period for investment banking fees in the region since 2012, according to estimates from Thomson Reuters.
Nadim Najjar, managing director, Mena, Thomson Reuters, said: "The value of announced M&A transactions with any Middle Eastern involvement reached $56.2 billion during 2015, 13 per cent more than the value registered during the same period in 2014 and marking the best annual period since 2008."
"Middle Eastern equity and equity-related issuance totalled $5.7 billion during 2015, a 50 per cent decline from 2014 and the slowest annual period for equity capital markets issuance in the region in two years. Middle Eastern debt issuance reached $6.2 billion during the fourth quarter of 2015, a significant increase compared to the value raised during the previous quarter," he added.
In respect to investment banking fees, fees from completed M&A transactions totalled $213.1 million during 2015, a four per cent increase compared to a year ago and the only investment banking product in the region to see a year-over-year gain.
M&A fees accounted for 33 per cent of the overall Middle Eastern investment banking fee pool, the highest annual share since fee records began in 2000.
Equity capital markets underwriting declined 33 per cent compared to last year, while syndicated lending fees totalled $278.6 million, down 16 per cent from 2014. Fees from debt capital markets underwriting declined 33 per cent year on year to $59.1 million.
HSBC earned the most investment banking fees in the Middle East during 2015, a total of $62.9 million for a 9.9 per cent share of the total fee pool and up 2.1 wallet share points compared to a year ago.
HSBC also topped the completed M&A fee rankings, while Nomura was first for DCM underwriting. EFG Hermes took the top spot for ECM underwriting fees in the region with 15.5 per cent share.
Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with $18.2 million in fees for 6.5 per cent of the market.
As for M&A deals, outbound M&A drove activity, up 34 per cent from 2014 to reach $35.2 billion, the highest annual total since 2008. Overseas acquisitions from the UAE accounted for 46 per cent of Middle Eastern outbound M&A activity, while acquisitions by companies based in Qatar and Saudi Arabia accounted for 36 per cent and 10 per cent, respectively.
Domestic and inter-Middle Eastern M&A decreased 16 per cent year on year to $11.3 billion.
Inbound M&A also saw a marked increased, up 29 per cent to $5.4 billion. Healthcare was the most active sector, accounting for 24 per cent of Middle Eastern involvement in M&As.
The largest deal with Middle Eastern involvement during the year was the $2.2 billion acquisition of the Al Noor Hospitals Group by South Africa-based Mediclinic International.
In respect to equity capital markets, 11 initial public offerings raised $2.6 billion and accounted for 45 per cent of full year activity in the region.
Follow-on and convertible offerings accounted for 17 per cent and 38 per cent respectively. Aabar Investments raised $2.2 billion from a convertible offering in March, the largest equity offering in the region during the year. HSBC took first place in 2015 Middle Eastern ECM ranking with a 16.5 per cent market share.
As for debt capital markets, Middle Eastern debt issuance reached $6.2 billion during the fourth quarter of 2015, a significant increase compared to the value raised during the previous quarter.
Despite the quarterly increase, full year bond issuance in the region decreased 19 per cent from last year to $30.2 billion during 2015, marking the lowest annual total since 2011. The UAE was the most active nation accounting for 60 per cent of activity, followed by Bahrain with nine per cent.
International Islamic debt issuance declined 23 per cent year on year to reach $28.9 billion during 2015. Nomura took the top spot in the Middle Eastern bond ranking during 2015 with a 27 per cent share of the market.
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