MENA M&A deal values drop 15% in H1 2010 to US$18.5 billion compared to H1 2009
Mergers & Acquisitions (M&A) total disclosed deal value announced in the Middle East and North Africa (MENA) region in the first half (H1) of 2010 dropped by approximately 15% to US$18.5 billion, compared to deals worth US$21.7 billion announced in H1 2009, according to Ernst & Young.
Compared to the previous quarter (Q1 2010), Q2 2010 saw an increase of 85% in total announced deal value which is up from US$6.5bn to US$12bn. In terms of total number of deals, there was a 12% decline between quarters, from 76 deals in Q1 2010 to 67 deals in Q2 2010.
Phil Gandier, Head of Transaction Advisory Services at Ernst & Young MENA says: "Fewer deals took place in Q2 2010 compared to Q1 2010, but their value is significantly higher. Despite a decline in the number of deals in the past six quarters, deal value has now increased to its second highest since Q1 2009. Domestic and inbound deals have dropped in volume and value compared to Q2 2009, but outbound transactions have increased as regional investors increasingly invest overseas."
Egypt, Saudi Arabia, Qatar and Jordan are the most active
The countries that experienced a large degree of domestic activity in terms of number of transactions in Q2 2010 were Kuwait (7 deals), followed by Jordan (5 deals) and Egypt, Saudi Arabia and the UAE (3 deals each). Egypt ranked highest in the region in terms of deal value, comprising approximately 28% of the total disclosed deal value (US$624mn). Oman closely followed at 23% (US$525mn) and the UAE at 16% (US$372mn).
Outbound deals beat inbound and domestic in value
Domestic transactions by volume (number of deals), comprising 45% of total announced deals in Q2 2010 outnumbered inbound and outbound deal activity, as was also the case in Q2 2009. Outbound deals held the greatest value among total announced deals, comprising US$9.1bn, or 76% of total announced deal value in Q2 2010. Comparatively, in Q2 2009, domestic deal activity saw the highest deal value, averaging at approximately 47% of total announced deal values.
Diversified Industrial Products shows highest sector-wise activity
The sectors that attracted the most inbound deal activity in Q2 2010 were Diversified Industrial Products (3 deals) and Consumer Products (2 deals). The sector with the greatest inbound deal activity in Q2 2010 in terms of deal value was Mining, worth US$464 million. The other two sectors with the highest deal value in inbound deal transactions were Diversified Industrial Products (worth US$57.5 million) and Banking and Capital markets (worth US$30 million).
- Disclosed M&A deal value slides from US$15.64 billion in Q3 2008 to $7.14 billion in Q3 2009: Ernst & Young
- Regional M&A deal values drop by 59% in Q1 2010 over Q1 2009
- Middle East IPOs raise US$1 billion in H1 2010: Ernst & Young
- Global M&A value at lowest point since 2004
- Oman to add US$6 billion in Islamic assets, says Ernst & Young