UAE leads Middle East's $25 bln M&A activity in H1 2018: report

The total value of mergers and acquisitions (M&A) in the Middle East soared by 62 percent year-on-year to $25.4 billion in the first half of 2018, compared to $15.7 billion, led by the UAE and stronger cross-regional activity, global law firm Baker McKenzie said in a recent report.

“Overall Middle East activity has been strong in H1 2018, with a significant uptick in aggregate values for both domestic and cross-regional deals compared to the same period last year,” said Omar Momany, head of corporate/M&A, Baker McKenzie Habib Al Mulla, UAE.

“With a handful of standout mega deals and the governments across the Middle East catering to implement investor-friendly reforms and policies, the region is set to experience promising levels of M&A activity in the second half of the year,” he added.

Cross-border deal activity rose 65 percent of all the Middle East M&A activity.

The UAE continued to drive both inbound and outbound deal flow, accounting for 34 deals totaling $6.6 billion. Dubai's Emirates NBD’s $3.2 billion acquisition of Turkey-based Denizbank in April was ranked the top cross-regional deal by value, the report revealed.

Meanwhile, deals targeting the Middle East jumped by 174 percent to $8.1 billion in H1 2018. Inbound deal activity was led by the acquisitions of Abu Dhabi National Oil Company’s oil field concessions by Austria’s OMG and French oil and gas giant Total, amounting to $2.6 billion. 

Outbound cross-regional deals from the Middle East increased by 20 percent in value to $7.6 billion as deal volumes rose by 9 per cent to 82  deals.

Separately, domestic deal values spiked three-fold compared to the same period of 2017, driven by the pending $5 billion merger of The Saudi British Bank (SABB) and Alawwal Bank in Saudi Arabia.

The industrials sector was the top target sector by volume of deals originating from the Middle East with 16 outbound deals, followed by the financial services sector with 11 deals.

The financial services sector was, however, the top target sector by deal value, registering aggregate deal values of $3.2 billion.

"The governments across the Middle East continue to drive their economic reform agenda and align with international standards, as evidenced by the privatization and consolidation trends across industry sectors in the region and the demand for capital and business growth overseas,"  Karim Nassar, corporate/capital markets partner at Baker McKenzie's associated firm in Saudi Arabia, added.