Middle East and Africa M&A Values Plunge 62% Q-on-Q In Q3 2014

The total value of mergers and acquisitions (M&As) in the Middle East and Africa region plummeted 62 per cent to reach $7.3 billion in the third quarter of 2013, according to a report from Mergermarket.

This compares with a deal value of $19.2 billion in Q2 2014 that was recorded from 116 deals, the report said.

Overall, the region recorded deals worth a combined total of $33.3 billion in 2014 till date, almost 31 per cent lower than the same period in 2013, the report said.

Mergermarket attributed the sharp decline in total values to the lack of inbound M&A, with the inbound values down by 65.2 per cent compared to the same period in 2013.

However, the Middle East and Africa region saw a rise in real estate M&As from nine deals in 2013 to 13 this year, according to Mergermarket.

“The value of these deals at $6.1 billion also represents the highest on Mergermarket record, 27 per cent higher than 2010’s previous peak,” the report added.

Telecommunications M&As led the region’s activity by deal value up to the end of Q3 and accounted for $6.9 billion (20.5 per cent share), followed by energy, mining & utilities with $6.2 billion worth of deals (18.5 per cent share).

The biggest deal was recorded this year was the 51 per cent stake sale in Orascom Telecom Algerie SPA by Global Telecom Holding to Fonds National d’Investissement for an investment of $2.6 billion.

The decline in deal value follows a steady growth in M&As over the last few years as the regional economy recovered from the global recession in 2009.

The total value of M&A’s across the Middle East and Africa rose by 26.9 per cent to $64.2 billion in 2013, up from $50.6 billion in 2012. In 2013, the region recorded the highest rise in deal value during the last six years with all quarters posting values above $12 billion.

The highest valued deal in 2013 was the merger of the UAE’s state-owned firms Dubai Aluminium Company and Emirates Aluminium at $7.5 billion earlier last year. Telecom provider Etisalat’s acquisition of a 53 per cent stake in Maroc telecom for $6.1 billion was the second highest valued deal last year.