Dubai: Mergers and Acquisitions (M&A) activity in the Middle East and North Africa (MENA) region has remained robust during the current decade, barring 2015 when both the number and value of deals significantly declined, an Al Masah Capital Limited Report titled MENA M&A Industry reveals.
During the period 2010-2015, the region witnessed M&A deals worth $105.5 billion with GCC-based companies leading the way in terms of volume and value year-on-year, peaking at an unprecedented 88.1 per cent of the total value of deals in 2015.
According to the report, Qatar, Egypt and UAE with deals worth $22.37 billion, $21.72 billion and $21.29 billion respectively, accounting for 62 per cent of the total deal value during the period, were the most preferred investment destinations in MENA.
Real Estate & Construction, with 239 deals worth $29.51 billion, Financial Services & Banking with 346 deals worth $23.04 billion, Telecom with 41 deals worth $15 billion and F&B with 99 deals worth $5.72 billion were the most attractive sectors collectively accounting for 725 deals worth $73.2 billion.
The report said M&A activity in the MENA Region has gained traction over the years primarily due to strong fundamentals and favourable demographics, and driven mainly by GCC-based entities with larger risk appetites and strong liquidity positions attained during periods of high oil prices.
The rapidly changing macroeconomic environment in 2015 due to geopolitical tensions and the anticipated decline in spending by governments on the back of weakened oil prices, have resulted in the total value and volume declining to $7.78 billion and 193 deals respectively, registering the lowest levels in six years.
On the contrary, global M&A value soared to an all-time record level in 2015, with 43,302 deals worth nearly $4.8 trillion announced, the previous highest being $4.6 trillion in 2007.
According to the report, all the six GCC countries were among the top nations to lead outbound investments from the MENA region. This trend is expected to continue going forward, as GCC companies look to drive growth by expanding into key emerging nations through strategic acquisitions.
