Middle East merger transactions hit $13.9b
(4/15/2018 6:44:00 AM)
The value of announced merger and acquisition (M&A) transactions with any Middle Eastern & North African (Mena) involvement reached $13.9 billion during the first quarter of 2018, seven per cent more than the value recorded during the first quarter of 2017 and a three-year high.
This was revealed in the latest report released by Thomson Reuters, the world's leading source of intelligent information for businesses and professionals.
“Deals with a Mena target reached an 8-year high, rising to $11.2 billion, up 50 per cent from the same period in 2017, while inter-Mena or domestic deals reached a five-year high, also up 42 per cent year-on-year,” Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said.
Driven by Total SA’s acquisition of 20 per cent of Umm Shaif and Nasr concession of Emirati state-owned Abu Dhabi National Oil Co for $1.1 billion, Mena’s inbound M&A currently stands at an all-time high. At the same time, outbound M&A decreased from $3.3 billion in the first quarter of 2017 to $779 million so far this year.
Energy and power deals accounted for 54 per cent of Mena involvement M&A by value, and despite having the same number of transactions as the financial sector, the latter only accounts for 10.7 per cent of the region's M&A activity.
Mena equity and equity-related issuance totalled $1.4 billion during the first quarter of 2018, a 158 per cent increase year-on-year. Out of the six transactions announced so far this year, five have been follow-on offerings, raising a total of $1.3 billion and accounting for 92 per cent of the quarter's equity capital market (ECM) activity in the region.
Orange Egypt follow-on raised $866 million and stands out as the biggest deal for the first quarter of 2018. EFG Hermes leads the Mena ECM ranking with a 63.4 per cent market share.
Despite showing a 25 per cent decrease compared to the first quarter of 2017, debt issuance in the Mena region is at its second highest level since our records began, reaching $23.9 billion so far this year. The UAE was the most active nation in the region accounting for 33.3 per cent of activity by value, followed by Oman with 29 per cent. International Islamic debt issuance increased nine per cent from the first quarter of 2017 to reach $13.6 billion so far in 2018.
Also, Mena investment banking fees totalled an estimated $243.1 million during the first quarter of 2018, six per cent less than the value of fees recorded during the first quarter of 2017.
“Debt capital markets underwriting fees totalled $62.9 million. Despite being down 18 per cent year-on-year, this was the second highest start of the year in the region since our records began in 2000,” Najjar said.
Equity capital market fees decreased 46 per cent to $8.4 million, while fees generated from completed M&A transactions totalled $15.1 million, an 82 per cent decrease from last year and the lowest annual start since 2004. Syndicated lending fees reached a record high of $156.6 million, up 87 per cent from first quarter of 2017. Debt capital markets (DCM) fees accounted for 26 per cent of the overall Mena investment banking fee pool.
Syndicated lending fees accounted for 64 per cent, the highest share of the regional fee pool since our records began in 2000. On the other hand, the share of completed M&A advisory fees fell to its lowest level, only accounting for six per cent of the market. Equity capital markets (ECM) underwriting fees accounted for three per cent, the lowest since 2011.
Standard Chartered earned the most investment banking fees in the Mena region during the first quarter of 2018, a total of $25.8 million for a 10.6 per cent share of the total fee pool, also leading in the DCM underwriting league table. Moelis & Co topped the completed M&A fee rankings with 23.2 per cent of advisory fees, while ECM underwriting was led by Al Rajhi Banking & Investment with $3.1 million in ECM fees, or a 19.1 per cent share. HSBC took the top spot in the Middle Eastern syndicated loans fee ranking.
Times of Oman