Despite the political and economic turmoil in the region as well as the world, 2011 witnessed a dynamic and active M&A industry in the Middle East and North Africa. M&A volume increased by 21% from 2010 to 2011, with a total of 346 transactions compared to 286 transactions in 2010.
However, deal value totaled USD 31.85 billion in 2011, marking a very slight decrease of 1% from 2010. Domestic deals constituted 71.10% at 246 deals, in comparison to 39 inbound and 61 outbound deals in 2011.
Regional investors showed interest in both local and international markets, with 246 domestic deals for a total of USD 11.81 billion with UAE alone marking 54 transactions, and 61 outbound deals amounting to USD 17.65 billion, with a focus on oil and gas and power and utilities sectors.
On the other hand, international investors were hesitant to conclude M&A deals in the MENA region primarily due to the political atmosphere surrounding the area, marking only 39 inbound deals for a total of USD 2.37 billion.
The focus in 2012 is expected to be on the oil and gas, financial services, real estate and healthcare sectors. International investors are likely to stay away from the MENA region, but regional investors will remain active players in the M&A segment.
The average deal value in 2011 amounted to USD 92.05 million per deal, while the average deal volume for M&A deals was 29 per month. December took the lead in terms of volume with 40 M&A transactions. February witnessed the highest deal value of USD 6.43 billion, driven by IPIC's USD 5.7 billion deal with Cepsa.
Source: Zawya M&A Monitor
In terms of geographic focus, Saudi Arabia scored the largest targeted M&A deal values with USD 3,353 million, while UAE topped the charts in terms of targeted deal volume with 54 transactions. Although in the midst of the Arab Spring, Tunisia was able to mark the largest average deal value of USD 535 million in 2011, with four deals totaling USD 2.14 billion.
An example of the significant effect on the average was National Mobile Telecommunication Company and Princesse Holding acquisition of a 50% stake in Orascom Telecom Tunisia for approximately USD 1.2 billion.
Source: Zawya M&A Monitor
In terms of sector focus, the financial services sector witnessed the highest M&A activity with 22.80% of all transactions for a total value of USD 5.01 billion. Industrial manufacturing, real estate and oil and gas sectors took 14.53%, 10.83% and 4.27%, respectively.
In terms of deal value, the oil and gas sector with USD 6.97 billion took first place. Financial services, power and utilities, media and real estate followed with USD 5.01 billion, USD 3.38 billion, USD 2.7 billion and USD 2.4 billion, respectively.
Top 5 M&A Transactions by Value in 2011
Source: Zawya M&A Monitor
2011 Top M&A News:
LivingSocial to buy GoNabit
Markets give a thumbs-up to ENBD takeover of Dubai Bank
SGBL to merge with Lebanese-Canadian Bank
IPIC Makes EUR4.04B Bid For 53% Cepsa It Doesn't Already Own
Qatar Holding To Buy 6.2% Stake In Iberdrola
Regional M&As see best start in 3 years
UAE's Etisalat Scraps Plans For Near $12B Zain Stake
The following Zawya analysts contributed to this report: Lara Ghibril Team Leader, Nadine Sharrouf IPO Analyst
© Zawya 2012
