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MENA M&A deals record $14.8bn in Q1-20 – Report

MENA M&A deals record $14.8bn in Q1-20 – Report
Domestic M&A registered a 92% annual drop in Q1-20

Dubai – Mubasher: Investment banking fees in the Middle East and North Africa (MENA) region rose by 11% year-on-year (YoY) to an estimated $188.8 million during the first quarter (Q1) of 2020, with three-figure gains recorded across mergers and acquisitions (M&A) advisory and equity underwriting fees.

Advisory fees earned from completed M&A transactions skyrocketed by 266% YoY and generated $58.4 million, the highest value seen in the first quarter since 2017. Equity capital markets underwriting fees increased threefold to $15.9 million, while bond underwriting fees declined to a four-year low by 47% to $45.4 million, according to a report by Refinitiv.

Each of the financial and industrial sectors accounted for 25% of total investment banking fees earned over Q1-20. Jefferies LLC earned the most investment banking fees in the region during Q1-20, with a total of $27.8 million or a 14.7% share of the total fees.

The value of announced M&A transactions with any MENA involvement retreated by 85% annually to $14.8 billion during the first three months of 2020.

The number of deals went up by 4% over Q1-20. Monthly M&A increased in value for the third month in a row, with March 2020’s posting the highest monthly total in 11 months at $6.1 billion.

Over the January-March period, domestic M&A registered a 92% annual drop to $6.9 billion. Inbound M&A fell to a four-year low by 88% to $1.8 billion, while outbound M&A declined by 53% to $1.4 billion.

Deals in the industrials sector contributed 43% of MENA target M&A activity during Q1-20. The UAE was the most targeted country, followed by Egypt and Qatar. 

According to the report, MENA equity and equity-related issuance more than quadrupled to $782.9 million during Q1-20 and one initial public offering (IPO) was recorded.

In addition, Saudi Arabian private healthcare operator, Dr Sulaiman Al Habib Medical Group, raised $699.7 million on the Saudi Stock Exchange (Tadawul) at the beginning of March. 

EFG Hermes, Jadwa Investment Co, and Riyadh Bank shared the first place in the MENA ECM league table over Q1-20.

As for debt markets, MENA debt issuance totalled $19.5 billion, down to a four-year low of 40% YoY. March issuance slowed to $571.9 million, marking the lowest monthly total since August 2019. 

Saudi Arabia and Qatar were the most active issuer nations with $9.9 billion and $5.0 billion in bond proceeds, respectively.