Middle East and Africa M&A activity jumps 52% in Q1 2021

M&A targeting the region reached $32.7bn across 110 deals, up from $21.5bn in 85 deals in the first quarter of 2020

Merger and acquisition deals targeting the Middle East and Africa rose 52 per cent in the first quarter of 2021, led by the tech sector, as the region attracted more foreign investment, Mergermarket data shows.

The Middle East and Africa region recorded a total of $32.7 billion across 110 deals in the first quarter of 2021, up from $21.5bn in 85 deals conducted during the same quarter last year, according to the financial data provider.

"Foreign investment into the region has been key to the increase in the opening quarter," Mergermarket said.

Inbound activity reached $24.7bn across 52 transactions in the first quarter of 2021, the highest quarterly inbound value since fourth quarter of 2007, accounting for 75.6 per cent of the total regional M&A value so far this year.

Technology remained the most active sector in the region by both value and volume, jumping to $14.7bn across 31 deals. Three of the region's 10 largest deals targeted the tech sector.

The energy, mining and utilities sector has also seen an increase by both value and volume, reaching $4.6bn in 18 deals so far this year.

The Middle East and Africa recorded a surge in private equity deal-making in the first quarter of 2021, with an increase in both buyouts and exits.

Sponsors invested a total of $18.3bn across 26 buyouts in the first quarter of this year, which represents the region's highest quarterly buyout value and volume on record, according to the report.

Global M&A activity reached $1.16 trillion in transactions in the first quarter, making 2021 the most active annual opening on record, it said.

Cross-border deals were a significant contributor to overall activity, hitting a record of $516.6bn. The two largest deals announced in the quarter were cross-border deals that involved US targets: AerCap Holding’s $31bn bid for GE Capital Aviation Services and the planned $28.6bn merger of Canadian Pacific Railway and Kansas City.

Special purpose acquisition companies (SPACs) played a large part in the overall increase in IPO activity and, particularly, in the US. Year-to-date, more than $97bn has been raised by 304 SPACs globally, the figures showed.

Except for the Middle East, all other global regions lost market share in the global deal value.

“Carrying forward the momentum of [the fourth quarter of 2020], global merger and acquisition activity turned in a strong first quarter performance," Mark Druskoff, data-driven content co-ordinator (North America) at Mergermarket, said.

"While many themes crossed over into 2021, such as the technology sector’s dominance and the continued strength of private equity, some notable shifts did occur in terms of deal size and geographic concentration of deals.”