The Middle East’s deal activity is witnessing a significant increase during the second quarter (Q2) of 2017, according to Baker McKenzie’s cross-border mergers and acquisitions (M&A) Index. The increase is despite the continued political turbulence and instability in the region.
The cross-border deals carried out in the Middle East in Q2 2017 have increased, with the Middle East Index specifically increasing to 201.5. The increase in the cross-regional deal activity was mainly fueled by a significant increase in the outbound M&A.
“The first half of 2017 witnessed an impressive four-fold increase in the Middle East outbound deal value compared to the same period last year, largely due to two mega transactions,” said Will Seivewright, the M&A partner at Baker McKenzie Habib Al Mulla. He added that even though M&A deals dropped throughout Q2 2017, generally, the cross-border and cross-regional activity right now is promising for the rest of the year.
The main country driving the growth of M&A in the Middle East region is the United Arab Emirates (UAE), with the highest activity in the region in terms of inbound and outbound investment.
In terms of inbound M&A in the Middle East, the volume of such cross-regional deals dropped by 38% in Q2 2017, with only five deals targeting the Middle East—worth $1.84bn. This is considered a decrease by 73% compared to the same quarter in 2016, according to Baker McKenzie.
The UAE was the top target country in terms of both volume and value, with three deals in different sectors, worth $1.07bn, and France being the top bidder country by value during Q2 2017. The best performing sector by volume and value in Q2 2017 was the financial services sector, with three deals worth $1bn.
Outbound cross-regional deals from the Middle East reached $17.2bn, which is considered the highest outbound M&A value since 2015.
The UAE was the most active outbound investor country in the Middle East with six deals worth $16.6bn, followed by Bahrain with three deals worth $571m, and Qatar with one deal worth $73m.
The pharmaceutical sector stood out with the highest value with $9.05bn acquisitions. The transportation sector was top in terms of deal volume, recording three deals.
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