Mergers and acquisitions (M&A) transactions in the Middle East have grown by 250% in the second quarter (Q2) of 2014 compared to Q1 2014, recording a value of $14bn, according to the Thomson Reuters’ quarterly investment banking analysis on the Middle East, published on Monday.
The report noted that this is the highest registered quarterly value since Q1 2011. However, on a larger scale, it added that the value of M&A deals during the first half (1H) of 2014 has declined 4% from the same period in 2013, highlighting $19.7bn in total.
Fees earned from M&A transactions amounted to $110.6m during the same period, a 3% increase compared to that during 1H 2013.
The number of domestic and inter-Middle Eastern M&A transactions has declined 49% from 1H 2013 to $6.9bn during 1H 2014, according to the report.
Conceding with the report was the Sunday announcement of Abraaj Group that it intends to acquire up to 100% of the shares of confectionary company Bisco Misr Company through issuing a mandatory tender on the Egyptian Stock Exchange.
The completion of the proposed transaction is awaiting the approval of the Egyptian Financial Supervisory Authority (EFSA).
Earlier in June, the EFSA has approved an offer submitted by Beltone-Sawiris alliance to acquire 20% of the EFG-Hermes. However, the acquisition was not completed as the alliance refused the rate offered for purchase.
The Reuters report also mentioned that inbound M&A has declined 19% in 1H 2014 compared to 1H 2013, registering $1.3bn, and outbound M&A activity has risen by 83% to reach $7.6bn, the highest first half total since 2011. Qatar’s overseas acquisitions accounted for 46% of Middle Eastern outbound M&A activity, the report added.
The total value of equity and equity-related issuance in the Middle East during 1H 2014 has registered $2.9bn, marking a 6% increase compared to the corresponding period in 2013, said Nadim Najjar, Managing Director of Thomson Reuters in Middle East and North Africa.
Meanwhile, the debt issuance in Q2 2014 has reached the highest quarterly total ever, recording $18bn.
Najjar noted that Middle Eastern investment banking fees have also surged 72% in Q2, marking $237.9m. However, fees earned during 1H 2014, which registered $375.9m, have witnessed a 19% decline year on year.