MENA M&A hit $80bln in 2023, lowest since 2020: LSEG

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The value of announced M&A (mergers and acquisitions) transactions with any Mena (Middle East and North Africa) involvement reached $80 billion during 2023, down 7% compared to the previous year and the lowest annual total since 2020.

Although down 18% from 2022’s all-time record annual tally, the number of deals announced in the region during 2023 reached the third highest level since our records began in 1980, said LSEG (London Stock Exchange Group) in its Mena IB Review: Full Year 2023.

Deals involving a Mena target totalled $31.7 billion during 2023, down 35% from 2022 and a six-year low. Inbound deals involving a non-Mena acquiror declined 35% to $8.7 billion, while domestic deals decreased 35% in value to $23 billion. Mena outbound M&A totalled $44.1 billion in 2023, up 31% from 2022 levels and the highest annual total in sixteen years.

Financials sector most active

The Financials sector was most active, accounting for 27% of Mena target M&A during 2023, followed by the Materials sector with 24%. The UAE was the most targeted nation, followed by Saudi Arabia and Egypt. JP Morgan topped the any Mena involvement announced M&A financial advisor league table during 2023.

Equity capital markets

Mena equity and equity-related issuance totalled $13.3 billion during 2023, down 43% from 2022 levels and the lowest full year total since 2020. The number of issues declined 14% from 2022 but was higher than every other annual count since 2008.

Initial public offerings accounted for 81% of activity, while follow-on issuance accounted for 19%. A total of 48 initial public offerings were recorded during 2023, two less than in 2022. They raised a combined $10.8 billion, 47% less than the total proceeds raised by IPOs in 2022.

Adnoc Gas PLC raised $2.5 billion in its stock market debut in March, the largest IPO in the region in 2023 and the largest-ever listing on the Abu Dhabi Securities Exchange.

The energy & power sector was most active with issuers raising $4.8 billion, accounting for 36% of total equity capital raisings in the region in 2023. The financial sector followed, accounting for 21%. First Abu Dhabi Bank PJSC took first place in the Mena ECM underwriting league table during 2023 with a 20% market share.

Debt capital markets

Mena debt issuance totalled $69.9 billion during 2023, 83% more than the value recorded during 2022 but lower than the annual total recorded during each of the previous six years.

The number of issues declined 14% over the same period. Saudi Arabia was the most active issuer nation during 2023 accounting for 49% of total bond proceeds, followed by the UAE (33%), and Bahrain (6%). Financial issuers accounted for 51% of proceeds raised during 2023, while Government & Agencies accounted for 38%. Islamic bonds in the region raised $32.0 billion during 2023, an annual record. Sukuk account for 46% of total bond proceeds raised in the region, compared to 34% last year. Citi took the top spot in the Mena bond bookrunner ranking during 2023 with $7.6 billion of related proceeds, or an 11% market share. Standard Chartered PLC took first place in the Mena Islamic bonds league table.

Investment banking fees

An estimated $1.2 billion worth of investment banking fees were generated in Mena during 2023, 31% less than the value recorded during 2022 and the lowest annual total since 2018.

Advisory fees earned from completed M&A transactions in the region totalled $251.7 million, a 55% decrease from previous year levels and the lowest full year total in five years. Equity capital markets underwriting fees totalled $264.1 million, down 40% from 2022 and a three-year low.

Syndicated lending fees declined 29% to reach a six-year low of $438.7 million during 2023, while debt capital markets underwriting fees increased 86% to $245.8 million. Thirty-nine percent of all Mena fees were generated in the UAE in 2023, followed by Saudi Arabia (35%). First Abu Dhabi Bank PJSC earned the most investment banking fees in the region during 2023, a total of $89.4 million or a 7% share of the total fee pool.