Mubasher: Cross-border deal-making in the Middle East has grown in the second quarter of 2017, spurred by outbound mergers and acquisitions (M&A) despite lower inbound M&A activity, according to a report by Baker McKenzie.
With the UAE being the most active country in terms of inbound and outbound investment thanks to three inbound deals worth $1.07 billion and six outbound deals worth $16.6 billion, the Middle East Cross-Border M&A Index rose to 201.5, compared to a global score of 233.
"Largely due to two mega transactions, the first half of 2017 has seen an impressive four-fold increase in Middle East outbound deal value compared to the same period last year, despite a much smaller number of deals," said Will Seivewright, corporate/M&A partner at Baker McKenzie Habib Al Mulla.
Outbound investments in the region reached $17.2 billion in Q2-17, the highest M&A value since 2015, while deal volume fell 41% with only ten deals. Bahrain and Qatar followed the UAE as the highest bidder countries in outbound deals, with three deals worth $571 million and one deal worth $73 million, respectively.
“The pharmaceuticals sector was the stand-out industry by value, attributable to the mega $9.05 billion buyout of US-based Pharmaceutical Product Development by the sovereign wealth funds of Abu Dhabi and Singapore,” the report stated.
Inbound investments in the Middle East dropped 38% in value and volume in Q2-17, with a total of five deals worth $1.84 billion – a decrease of 73% year-on-year. France was the top bidder in terms of value, due to ENGIE’s $775 million acquisition of a 40% stake in UAE’s Tabreed.
“Financial services was the top performing sector by volume and value in Q2-17, accounting for three deals valued at $1 billion,” the report said.
"While M&A deals targeting the Middle East dropped in both value and volume in Q2-17, the overall level of cross-border and cross-regional activity that we are seeing is a promising indicator for the rest of the year," Seivewright added.
On a global level, a total of 1,368 cross-border deals worth $345.8 billion were announced in Q2-17; 10% down in volume and 1% down in value compared to Q1-17.
