MENA records 84 M&A deals valued at $18.2 billion

Mena merger and acquisitions (M&A) activity declined in Q1 2017 recording 84 deals, compared to 115 deals in Q1 of 2016, according to EY’s Q1 2017 M&A report. However, Mena deal values remained broadly stable reaching $18.2bn in Q1 of 2017, compared to $18.4bn in Q1 2016.

Mena records 84 M&A deals valued at $18.2bn in Q1
Mena records 84 M&A deals valued at $18.2bn in Q1

The outbound announced deal value increased substantially by 636 percent from $1.3bn in Q1 2016 to $9.3bn in Q1 2017. Furthermore, the announced inbound deal value also rose exponentially from $0.5bn in Q1 2016 to $5.7bn in Q1 2017. On the contrary, the announced deal activity value for domestic transactions witnessed a significant decrease of 81 percent in Q1 2017 compared with Q1 2016. Within the Mena region, the overall top ten deals contributed over 90 percent to the total deal value registered in the period.
Phil Gandier, MENA Transaction Advisory Services Leader, EY, says: “As oil prices continue to stabilise, and Government initiatives foster greater economic certainty, MENA executives are feeling more optimistic that the economic conditions are right to return to deal making. Consequently the M&A pipeline has never been better – both quality and quantity. Furthermore, we expect the recent reversal of certain austerity measures in the GCC to result in more confidence in deal making.”

In the region, Saudi Aramco’s acquisition of a 50 percent stake in Malaysian state-owned energy company Petronas’ RAPID project for $7bn was the largest deal of the quarter.
Anil Menon, MENA M&A and Equity Capital Markets Leader, said: “Mena executives consider growing market share as the main strategic driver for pursuing an acquisition. 24 percent of the CCB respondents place the greatest attention and resources on organic growth as one of the largest capital management issues.”