Middle East M&A Deals Up 23% In 2014

The value of mergers and acquisition (M&A) transactions with Middle Eastern involvement reached $50.3 billion, up 23 per cent in 2014, according to a report by Thomson Reuters.

The figure was the highest annual total since 2010 and was largely driven by outbound M&A activity, the report said.

The value of outbound M&A deals from the Middle East reached $26 billion, up 74 per cent from 2013, and the highest annual total since 2009.

Qatar’s overseas acquisitions accounted for 65 per cent of the region’s outbound M&A activity while deals from the UAE and Saudi Arabia accounted for nine per cent and 15 per cent respectively.

On the other hand, domestic and inter-Middle Eastern M&A declined 12 per cent year-on-year to $14 billion during 2014. Inbound M&A also declined, falling 30 per cent to $4.2 billion.

The largest deal with Middle Eastern involvement in 2014 was the $9.1 billion offer by the Qatar Investment Authority and Canada’s Brookfield Property Partners for Songbird Estates, which owns London’s Canary Wharf financial district.

Boosted by this deal, real estate was the most active sector in 2014, accounting for 38 per cent of Middle East involved M&A, the report said.

“The value of announced M&A transactions with any Middle Eastern involvement reached $22.7 billion during the fourth quarter of 2014, more than double the value registered during the previous quarter, and the highest quarterly total since the first quarter of 2008,” said Nadim Najjar, managing director, Middle East and North Africa, Thomson Reuters.

“Middle Eastern equity and equity-related issuance totalled $11.4 billion in 2014, a 173 per cent increase in activity from 2013 ($4.2 billion), while Middle Eastern debt issuance reached $3.5 billion during the fourth quarter of 2014, half the value raised during the third quarter.”

In line with the growing deal activity in the region, investment banking fees also saw a growth especially in Q4 2014, the report said.

Investment banking fees in the Middle East grew to reach $147.25 million in Q4 2014, up 19 per cent from the same period in 2013.

But despite an uptick in the investment banking fees towards the end of the year, values declined by three per cent overall in 2014, Thomson Reuters noted. Fee value fell to reach $751.7 million in 2014 from $776.2 million in 2013.

M&A deals across the region have been rebounding as the global economy recovers from the financial lows of 2009.

Regionally, countries such as the UAE, Saudi Arabia and Egypt are set to see the most deal activity in 2015, according to an earlier report by Mergermarket.