Egypt’s M&A deals account for 75.1% of North Africa’s values: Mergermarket

Hagar Omran
3 Min Read

Egypt’s mergers, and acquisitions (M&A) deal’s value accounts for 75.1% of the North African value and 58.3% of its own volume, up from 48.4% and 39.5%, respectively, in year to date (YTD) 2019, Merger market company announced on Wednesday at the second annual Egypt M&A and Private Equity Forum held in cooperation with HC Securities & Investment.

It was declared during the forum that general M&A in Egypt remained robust YTD 2019, with 14 deals worth $1.3bn compared to 15 deals worth $1.9bn YTD 2018.

Two deals made up the bulk of Egypt’s deal value in YTD 2019, both inbound M&A deals, the first was the acquisition of a stake in the Gulf of Suez Petroleum Company by Dragon Oil Plc, worth $600m, while the second deal was between Netherlands-based telecom services company, VEON Ltd, and Global Telecom Holdings S.A.E., worth €578m.

VEON Ltd has agreed to acquire all the outstanding shares of Global Telecom Holding S.A.E. that it does not own by way of a mandatory takeover offer, according to Merger market, adding that the rise of inbound M&A is due to the Egyptian pound’s devaluation against foreign currencies leading to low valuations, which has made Egyptian companies more attractive to foreign investors.

Despite the global slowdown in deal making, which dropped by 11.4% in 3Q19. It was concluded that after the flotation of the Egyptian pound in 2016, investors adopted a “wait and see” approach to assess the post-flotation economic situation.

This has changed since 2018, driven by currency stability and economic reforms and has resulted in confidence by investors and more M&A activities.

“Egypt is seeing more M&A activities from foreign investors compared to previous years. The overall positive macroeconomic outlook, successful fiscal and monetary policies, and bullish business environment have made Egypt a high rank investment destination,” Hussein Choucri, Founder, chairperson and managing director of HC Securities and Investment commented.

“We continue to be active in M&A in Egypt and the Gulf where we advised strategic and financial investors on successful transactions during the past 12 months in the packaging, oil and gas, food & beverage and healthcare sectors,” Choucri added.

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