Saudi M&A deals surge to record value in H1

Saudi Arabia saw a sharp jump in M&A deal value worth $72.6 billion during the first half of 2019, the highest M&A value on record in the Kingdom, according to a report by M&A data and intelligence provider Mergermarket.

This jump was due to the blockbuster $70 billion SABIC deal announced in Q1 2019, the region’s highest value deal on record and the second largest industrials and chemicals deal globally, the report added.

In total, the Kingdom saw 14 deals worth $72.5 billion in H1.

The Saudi Arabian IPO market, according to Mergermarket data, has seen limited activity in the last few years, however in H1 2019, the country experienced IPOs worth $752 million spread across three offerings, its highest value since 2015.

These IPOs included the offering for real estate business Arabian Centres Company, worth $659 million; Maharah Human Resources Company worth $207 million and Ataa Educational Company, worth $93 million.

The project finance sector in the country has also been active in the last 18 months, according to Mergermarket’s infrastructure focused sister brand Inframation, with big projects set to reach financial close in the country including two Independent Water Projects (IWP), a solar photovoltaic (PV) project and a wind farm.

Projects included the $646 million Shuqaiq 3 project awarded to Acciona and Marubeni in a consortium with local developers, which closed in May; the $715 million Rabigh 3 project, awarded to ACWA Power and Saudi Brothers, closed in March and the 400MW Dumat al Jandal wind farm, awarded to EDF and Masdar, which closed in June, the report added.

The Saudi infrastructure pipeline looks strong, as the government plans to use PPPs and privatizations to achieve its Vision 2030 plan.

The National Centre for Privatization (NCP) has a huge range of projects in the power, water, healthcare, road and rail sectors. Live transactions by the NCP currently include a PPP to build 60 schools, a radiology PPP, the King Faisal Specialist Hospital staff accommodation PPP and the King Faisal Specialist Hospital equipment management services PPP. Eight solar PV projects are also currently at the pre-qualified proponents stage, the report maintained.