Mergers and acquisitions plummet in Middle East

02 July 2015

UAE bucks trend

The total value of mergers and acquisitions (M&A) targeting the Middle East and North Africa (excluding Israel) dropped by 42.5 per cent to $7.3bn in the first half of 2015, compared with $12.7bn in the same period in 2014, according to the UK’s Mergermarket’s Global M&A Trend report.

The number of deals fell from 67 in the first half of 2014 to 33 in the first half of 2015.

This follows a bumper year for M&A in 2014.

The UAE led inbound M&A activity in the first half of 2015 in the region, as foreign companies snapped up six local companies. The deals were worth $3.3bn in total, a more than 2,800 per cent increase from the $113m of deals in the first half of 2014, the report continues.

The UAE made up 33.9 per cent of total inbound M&A activity for the Middle East and Africa, which increased overall.

Transaction advisors in the UAE report being busy, with plenty of deals in the pipeline.

The total value for M&A targeting the Middle East and Africa fell 29.4 per cent to $18.9bn, its lowest level since the first half of 2009, according to Mergermarket.

This was also the last time oil was priced at below $70 a barrel, suggesting a strong correlation with commodities prices. Investors in the energy sector are seeing reduced profits and pressure to rationalise their holdings.

The energy, mining and utilities sector remained the most important in the region, with the value of deals reaching $8.1bn, or 42.9 per cent of the total. It also showed strong growth, increasing 84.5 per cent on the first half of 2014 value.

Domestic M&A value within the Middle East and Africa also fell by 52 per cent to $9.1bn in the first half of 2015.

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