UAE ranked top in Mideast M&A at $5.2 billion in 2013

Financial services and real estate bolstered M&A value

By Issac John (issacjohn@khaleejtimes.com)

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Published: Wed 22 Jan 2014, 12:14 PM

Last updated: Tue 7 Apr 2015, 10:18 PM

The UAE came number one in the value of mergers and acquisitions in the Middle East in 2013 as the combined value of regional M&A activities plummeted by 52 per cent in contrast to surge in deals across the globe.

M&A activities targeting companies based in the UAE were worth $5.229 billion in 2013, a slight decrease on the previous year’s $5.309 billion, according to data provided by Zephyr.

Qatar followed some way behind at $1.89 billion, a considerable drop on $6.691 billion in 2012, and Kuwait was third with $1.720 billion compared to $6.852 billion the previous year.

Worldwide, M&A activities rose to the highest level recorded since 2009. Global M&A volume fell back to its lowest point since 2008 to 71,811 transactions worth a combined $3.450 trillion in 2013. The value of deals targeting companies based in the Middle East fell sharply to $12.481 billion from $25.929 billion in 2012, a decrease of 52 per cent and the lowest result recorded in the last six years under review. In 2008, the region recorded 684 deals valued at $55.31 billion.

According to Nadim Najjar, Thomson Reuters managing director for Middle East, Africa, and Russia/Commonwealth of Independent States, the value of announced M&A transactions in the Mena and Russia region reached $43.4 billion during 2013, seven per cent more than the $40.7 billion recorded in 2012.

The value of M&A activity targeting companies based in Jordan, Bahrain and Iran rose year-on-year against a decline in the remaining Middle East countries. In terms of volume, Jordan led the way at 143 transactions in 2013, a 17 per cent improvement on 122 on 2012. The UAE came second on 88, marking the second consecutive yearly increase (2011: 57; 2012: 72) and Saudi Arabia third with 36 transactions, slightly down on 38 the previous year.

The volume of deals in the Middle East remained steady at 338 transactions compared to 339 in 2012, although this too was the lowest of the last six years, suggesting that individual deal values were lower during the 12 months, according to Zephyr database.

“This was illustrated in there being just two transactions worth more than $1 billion during 2013, compared to eight in the previous year. One factor in this decline was the relatively low value of private equity investment in the region, dropping 69 per cent from $805 million in 2012 to $250 million, while conversely, volume rose steeply from 13 to 29 transactions,” a Zephyr statement said.

In the Middle East, the core sectors of financial services and real estate once again bolstered M&A value, and the top two deals by value in 2013 targeted companies operating in these industries.

At number one was a merger between two publicly-listed real estate groups based in the UAE. Aldar Properties made an all-share offer to acquire all the outstanding stock held in Sorouh Real Estate in a deal worth $1.814 billion. This was followed by a rights issue by Kuwait Finance House worth $1.119 billion. These two transactions are worth a combined $2.933 billion, representing almost a quarter of the region’s total M&A value.


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