Mergers and Acquisitions (M&A) In the Mena Region for the First Quarter of 2017

Mergers and Acquisitions (M&A) In the Mena Region for the First Quarter Of 2017

Mergers and Acquisitions (M&A) In the Mena Region for the First Quarter of 2017

The below article is a representation of the original article published in Zephyr by Bureau van Dijk and hence all credit for this article belongs to them. The article provides a brief about the M&A activities in the Middle East and North Africa (MENA) region in the first quarter of 2017. Baker Tilly Kuwait has merely paraphrased the article to convey the same message. Target companies within Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, UAE, Yemen and part of the MENA region coverage within this article.


Increase in value and decline in volumes

MENA witnessed 160 M&A transactions in the first quarter of 2017 with a comprehensive value of USD 12.6 billion. While there was a 13% increase in value as compared to the last quarter of 2016 at USD 11.2 billion, it came against a 3% decrease in volume. This suggests that individual deals were executed at higher levels in the first quarter of 2017 as opposed to larger volumes with lower values. In fact the first quarter of 2017 saw the lowest volume since first quarter of 2015 at almost 148 deals as evident from the table below:


Deals by volume and value:

Announced DateNumber of DealsTotal deal value (USD Million)
 Q1 2017 160 12,645
 Q4 2016 165 11,164
 Q3 2016168 22,626
 Q2 2016 181 12,274
 Q1 2016 185 12,699
 Q4 2015170 10,252
 Q3 2015 188 2,577
 Q2 2015185 6,529
 Q1 2015148 5,106


M&A Deals in Q1 2017

Deal value(mil USD)
Deal type
Target Country
Acquirer Country
Deal status
 1,770 Minority stake 8% Abu Dhabi Company for Onshore Oil Operations AE China National Petroleum Corporation CN Completed
1,673 Acquisition 100% National Titanium Dioxide Company Ltd’s titanium dioxide business SA SA Tronox LtdAU Pending
 1,120 Minority stake 21% Arab Bank plc JO Consortium Completed
 1,000 Acquisition 100% FZ LLC AE Inc. US Announced
 929 Acquisition increased 67% to 93% Kuwait Food Company SAKKW Adeptio AD Investments SPC Ltd AE Completed
 898 Minority stake 4% Abu Dhabi Company for Onshore Oil Operations AE CEFC China Energy Co., Ltd CN Completed
 898 Minority stake 4% Abu Dhabi Company for Onshore Oil Operations AE CEFC China Energy Co., Ltd CN Completed
 820 Acquisition increased 50% to 100% The Saudi Petrochemical Company SA Saudi Basic Industries Corporation SJSC SA Announced
 731 Capital Increase 62% Fajr Petrochemical Company PSC IR – Completed
 667 Minority stake 43% El Mostakbal for Urban Development EG Banque Misr SAE EG Completed
 368 Capital Increase 30% Khorasan Steel Complex Company PSC IR – EG Completed
 355 Capital Increase 14% Doha Bank QSC QA – Announced
 242 Capital Increase 13% National Iranian Copper Industries Company IR – Completed
 213 Capital Increase 22% Mines and Metals Development Investment Company PSC IR Completed
 183 Minority stake 4% DAMAC Properties Dubai Co PSC AE Premium Investment International LLC AE Completed
 132 Acquisition increased to 99% United Bank of Egypt EG Central Bank of Egypt EG Announced
 97 Minority stake 13% International Medical Company Ltd SA Amanat Holdings PJSC AE Completed
 96 Minority stake and Minority stake 8% Al Aqeeq Real Estate Development Company; Arab Resort Areas Company SA A Taiba Holding Company SA Announced
 90Capital Increase 67% Iran Behnoush Company PSC IR – Announced
79 Minority stake 33% Educational Holding Group KW Boubyan Petrochemical Company KSCC KW Announced
79 Minority stake 9% EFG-Hermes Holdings SAE EG RIMCO EGT Investment LLC Completed

The deals for the first quarter of 2017 were dominated by four deals each worth USD 1000 million or more amounting to nearly 44% of the quarters overall value. There were 9 deals worth more than USD 500 million in the same quarter.

From the top 20 deals by value, Iranian companies dominated with 5 of those deals closely followed by UAE and Saudi Arabia at 4 deals each.

Foreign buyers dominated the M&A ecosystem and at USD 1,770 million, China National Petroleum Corporation’s acquisition of an 8% stake in an Abu Dhabi Company for Onshore Oil Operations was the largest in the quarter. The titanium dioxide (TiO2) business of National Titanium Dioxide is propositioned for a takeover by Tronox of Australia, the deal valued at USD 1,673 billion. Amazon, the US based e-commerce giant announced the acquisition of for a value of USD 1,000 million. is the largest online retail and marketplace in the Arab region.


Top Target Countries by Volume and Values

Top Country by Volume:

 Target Countries Q1 2016Q4 2016Q2017
Saudi Arabia181111

Egyptian companies at 33 deals was the leader in terms of volumes during the first quarter of 2017, on the other hand companies based in the UAE were a close second with 30 deals. While the quarter-on-quarter growth in the volume of deals in the MENA region mostly fell if not remained constant, Kuwait saw a growth five times higher at 17 (Q4 2016: 3).


Top Country by Value:

 Target Countries Q1 2016Q4 2016Q2017
Saudi Arabia6824222,687

UAE companies at USD 3,940 million were the leader in the quarter in terms of values. However, Saudi Arabia recorded a quarter-on-quarter growth at 6 times to USD 2,687 million in the first quarter of 2017 (Q4 2016: USD 422 million) thus overtaking Iran in deal making (Q4 2016: USD 2,361 million; Q1 2017 USD 1,862 million).


Top Target Sectors by Volume and Values

Top Sectors by Volume:

 Target Countries Q1 2016Q4 2016Q2017
Other services665344
Education, health7913
Chemicals, rubber, plastics182112
Wholesale & retail trade468
Insurance companies1078
Primary sector747
Food, beverages, tobacco756
Machinery, equipment, furniture, recycling595
Hotels & restaurants735
Metals & metal products444
Wood, cork, paper404
Textiles, wearing apparel, leather033
Gas, water, electricity412
Post and telecommunications122
Publishing, printing791
Public administration and defense000

Companies within the construction sector dominated the deals in the first quarter of 2017 with 23 announced deals valued at USD 1,126 million, while the Education and health industry were next by volume (Q4 2016: 9; Q1 2017: 13).


Top Sector by Value:

 Target Countries Q1 2016Q4 2016Q2017
Chemicals, rubber, plastics1,4496373,324
Primary sector1202,6202,787
Hotels & restaurants3,716111,029
Wholesale & retail trade2762721,025
Metals & metal products9021612
Other services2,9082,270526
Education, health46784198
Food, beverages, tobacco134178118
Machinery, equipment, furniture, recycling1031631
Insurance companies8481,52521
Wood, cork, paper6012
Textiles, wearing apparel, leather0010
Publishing, printing7460
Public administration and defense000
Post and telecommunications36900
Gas, water, electricity700

The most valued sector in the first quarter of 2017 was chemicals, rubber and plastics industry with a value of USD 3,324 million, followed by the primary sector (Q4 2016: USD 2,620 million; Q1 2017: USD 2,787 million).


M&A outlook MENA

A significant increase in M&A activity is sensed particularly in the UAE which has strong economic fundamentals and continues to draw investors to the region. The outlook for M&A activity in the MENA region is optimistic in the long run as threats to the stability of the MENA economy ease, and dealmakers regain confidence in the market, their apprehension should turn into appetite.

Source : “Baker Tilly in Kuwait – Corporate Finance Unit”