The value of mergers and acquisitions (M&A) activity in the Middle East rose in 2012 for the first time in three years, reaching the highest level since 2008.

The total value of M&As announced in 2012 hit $25bn, an increase of 76 per cent on the value of deals completed in 2011 and a reversal of declining activity since the onset of the financial crisis.

While the value of transactions rose, the number of them fell, according to figures from M&A tracker Bureau van Dijk. The number of deals in 2012 was 315, down from 418 in 2011.

Eight large deals of more than $1bn in value helped boost the figures above previous years volumes, but activity is still significantly below 2007-08 levels, when more than $50bn-worth of M&A transactions were announced each year. The total for the eight largest acquisitions of 2012 topped $17bn.

The largest transaction of 2012 was the acquisition of a 19 per cent stake in Industries Qatar by the local General Retirement and Social Insurance Authority from Qatar Petroleum. That deal was valued at almost $4bn. Qatar has become one of the most active countries for M&As, and in 2012 there were $6.7bn of transactions targeting Qatari firms. Kuwait was the most active country, with $6.8bn-worth of deals, mostly taking the form of investors acquiring minority stakes in Kuwaiti firms.

For the Middle East and North Africa (Mena) region, the value of M&As rose to almost $45bn in 2012, up from $30bn in 2011. That has been driven in part by several large acquisitions of Egyptian banks, most notably Qatar National Bank’s $2.6bn acquisition of Egypt’s National Societe Generale Bank, previously owned by France’s Societe Generale.

In contrast, global deal volumes have fallen in 2012 for a fifth consecutive year, in large part due to weak markets in North America, Europe, the Far East and Central Asia. Global M&A values fell to $3,144bn across 65,060 transactions, the lowest in terms of volume and value since 2004.

The New Year has also got off to a good start for the Middle East, with the announcement in mid-January that Abu Dhabi real estate companies Aldar and Sorouh have agreed a merger that will create a combined entity with $15bn in assets. It is one of the largest ever M&A transactions in the region.

Despite this, bankers and private equity firms say asset valuations in the Middle East remain too high for a significant pick-up in M&A transactions, and that the availability of funding from banks is also too constrained. This particularly weighs on the private equity industry, which has struggled to regain momentum since 2008 when $1.7bn-worth of deals were completed. In 2012, that had dropped to just $805m.