M&A activity shrinks in first quarter

Thirteen deals worth US$1.5 billion were concluded in the first quarter, a slip of $1bn compared with last year’s first-quarter haul of $2.5bn in deals.

Merger and acquisitions activity in the Middle East fell by a third in the first three months of the year compared to the same period last year, data from Mergermarket shows.

Thirteen deals worth US$1.5 billion were concluded in the first quarter, a slip of $1bn compared to last year’s first-quarter haul of $2.5bn in deals.

In the UAE, seven deals worth $447 million were completed in the first three months of the year. That was driven by Souq.com’s $292m funding round, in which Standard Chartered and the International Finance Corporation acquired equity stakes in the company in a deal that valued the e-commerce site at $1bn.

Saudi Telecom Company’s (STC) $494m purchase of shares in Viva, a Kuwaiti telecoms company, was the largest deal of the quarter. STC acquired 51.8 per cent of the Viva’s shares, below the company’s original target of 100 per cent ownership of the Kuwaiti firm, according to Bloomberg.

Mergers and acquisitions activity also increased in transport and construction. About $135m of deals were completed in the construction sector, up from $41m last year, while $90m were completed in transport, up from $21m a year earlier.

“The region remains attractive to cash rich international private equity investors,” said Will Selvewright, a corporate lawyer at Baker and Mackenzie. “Given the current healthy pipeline of both M&A and private equity related deal activity, we expect this trend to continue into the next quarter.”

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