Middle East M&A deal value declines in Q1

The Middle East region saw a 39.7 per cent drop in the value of mergers and acquisitions in Q1, according to a new report.

Mergermarket found that 13 deals were announced in the region in the first quarter, the same number as Q1 2015, but the total value decreased from $2.5bn last year to $1.5bn this year.

The company said the telecoms sector was the most targeted for deals in the Middle East as a result of Saudi Telecom Company’s $494m acquisition of Kuwait Telecommunications – the highest valued deal of the quarter. This compared to $223m last year.

There was also growth seen in construction deal value, from $41m in Q1 2015 to $135m in Q1 2016, and transport from $21m to $90m.

Mergermarket global research editor Kirsty Wilson said the UAE attracted the highest number of deals during the quarter, with seven totalling $447m.

“The highest valued UAE deal of the quarter was the $292m acquisition of e-commerce platform Souq.com by Standard Chartered Private Equity limited, Baillie Gifford and International Finance Corporation, in a funding round that valued the company at $1bn,” she said.

Baker & McKenzie Habib Al Mulla corporate/M&A partner Will Seivewright said he expected M&A activity to remain healthy after a record breaking year in 2015.

“The food and beverage and telecommunications sectors have been particularly active across the GCC, and notwithstanding the low oil prices and macroeconomic uncertainty, companies have continued their strategic expansion and/or consolidation plans,” he said.

“The region remains attractive to cash rich international private equity investors and given the current healthy pipeline of both M&A and private equity related deal activity, we expect this trend to continue into the next quarter.”