Mergers and acquisitions (M&A) deals in the Middle East have registered $9.5bn in the first quarter (Q1) 2015, according to the Thomson Reuters’ quarterly investment analysis on the region, published Monday.
Managing director of Thomson Reuters for the Middle East and North Africa region Nadim Najjar said in the report that the value marks a 152% increase compared to the corresponding quarter in 2014. It is also less than half of the registered value in the last previous quarter and the “best” annual start since 2012.
The highest quarterly value in M&A since Q1 2011, was registered in Q2 2014 where the transactions value recorded $14bn, up 250% than the previous quarter.
The Middle East has witnessed much M&A activity, with the latest announcement coming from Saudi dairy company Almarai. The company told Al-Borsa newspaper on 23 March that they are studying to acquire other food and agriculture companies, such as Dina Farms.
In the same sector, New York-stock market listed firm Kellogg’s has acquired 85.93% stakes of Egypt’s main biscuit and cake producer, Bisco Misr, equivalent to EGP 9.8m, the American firm announced in January.
Also in January, the Egyptian Financial Supervisory Authority (EFSA) approved Al-Nour Company for Dairy Product’s bid to purchase all shares of the stock-listed Arab Dairy Product Company (ADPC). This would occur with a minimum of 51% of its stakes, with the value of EGP 58 per share.
During the Middle East’s leading investment bank EFG Hermes’ One-on-One conference in Dubai in March, head of research Wael Ziada said his firm is expecting to see M&A activities led by Egypt. He added that the country has already seen two competitive M&A bids in the food sector in 2015.
Meanwhile, investment banking fees have marked $182m in Q1 this year, up 5% compared to the previous quarter and 20% in Q1 2014. Middle Eastern equity and equity-related issuance totalled $2.5bn during the concerned quarter, down 59% compared to previous quarter, Najjar added.
With regard to debt issuance, the first quarter has witnessed a 62% quarter-on-quarter increase, reaching $6.5bn. However, bond issuance in Q1 decreased 15% year-on-year, marking the lowest first quarter total since 2011.
Speaking about the most active countries in the region, Najjar said the UAE was the most active representing 78% of activities, followed by Saudi Arabia that represented 16%.
Najjar also mentioned that HSBC bank has topped the Middle Eastern bond ranking during the concerned quarter with a 13% market share.