Value of M&A activity in MENA falls 40% - report
2012-04-26 14:29:52
The total value of mergers and acquisitions in the Middle East and North Africa declined 40 percent to US$8.5bn in the first quarter of the year, compared to the same period the previous year, but the volume of deals rose seven percent, Ernst & Young said.
Despite the year-on-year drop, M&A deals increased 18.1 percent in the first three months of the year, compared to the fourth quarter of 2011.
The average deal size declined 34.7 percent from US$372.1m in the first three months of 2011 to US$242.9m during the same period in 2012.
“We are still seeing a level of caution in the regional markets. Overall, the positive news from the 2012 Q1 M&A numbers is that the start of this year has been better in comparison to the start of 201,” Phil Gandier, MENA head of transaction advisory services at Ernst & Young, said in a statement.
Nineteen sovereign wealth and private equity deals took place during the first quarter of the year, with ten in March alone. “This could mean that private equity players, who are usually the first movers in M&A, are taking comfort from upward revisions of regional economic growth projections and are gaining in transaction confidence,” said Gandier.
The largest two deals were both valued at US$2bn and involved UAE sovereign funds buying stakes in global assets, said Ernst & Young.
Abu Dhabi’s Mubadala in March acquired a 5.63 percent equity stake in Brazil’s Grupo while Centurion Investment acquired 40 percent stake in India’s UAE Exchange & Financial Services in February.
France Telecom SA acquired a US$973m stake in Egyptian Company for Mobile Services, the third largest deal of the quarter, followed by Qatar Investment Authority’s acquisition of One Cabot Square in the UK, and Mannai Corporation’s US$445m investment in Damas International.