Mena M&A deal values rise 11% in first quarter of 2022

The UAE was the most active in the region with deals rising 5% to $4.3bn in the first three months of the year

The Mena region has seen strong M&A activity since last year as economic growth accelerates.

Merger and acquisitions in the Middle East and North Africa grew 11 per cent to $21 billion in the first quarter of this year, according to data provider Refinitiv.

Deals valued at under $500 million reached $4.6bn this year, marking the strongest start to a year since records began in 1980.

The UAE was the most active in terms of its M&A activity which rose 5 per cent to $4.3bn this year, accounting for nearly half of all activity in the region.

“The largest Mena target M&A deal of the year so far is UAE’s hospital operator NMC Healthcare’s $2.25bn sale to its creditors. Healthcare was the most active sector in Mena with $2.3bn in deal activity, equivalent to a quarter of M&A activity in 2022,” Refinitiv said in a report.

The region has seen strong M&A activity since last year as economic growth accelerates on the loosening of Covid-19 restrictions.

The volume of M&A deals in the Mena region surged 66 per cent last year, according to a report by EY. There were 661 transactions worth $99bn last year, compared with 397 deals worth $85.2bn in 2020, the consultancy said.

The UAE experienced the highest deal activity in terms of volume with 303 transactions, while Saudi Arabia attracted the most M&A capital, worth $47.4bn.

Mena economies are expected to grow 5.2 per cent in 2022, the fastest rate since 2016, on higher oil prices, according to a recent World Bank report. However, the recovery is expected to be uneven, with crude exporters benefiting most from the current oil price rally.

Inbound M&A fell 42 per cent to $1.9bn in the first quarter of this year, while outbound M&A doubled in volume from last year to reach $8.8bn, Refinitiv said.

Meanwhile, Mena's equity capital markets raised $3.7bn from 15 offerings in the first quarter of 2022, up seven times on an annual basis. It is the strongest start to the year for equity capital markets since 2008.

“IPOs made up most of the total with 13 out of 15 ECM deals coming from an IPO,” the report said.

Saudi Arabia was the most active nation with $3.5bn in proceeds, followed by Egypt with $163.3m. The largest listing in Mena region was Nahdi Medical's IPO, which raised $1.3bn.

Investment banking fees in the Mena region surged 94 per cent to $430m, marking the highest year-to-date since records began in 2000.

Completed M&A fees also soared 569 per cent to a record $184m, accounting for 43 per cent of the overall investment banking fee pool.

Governments and agencies contributed to more than half of the fees earned in Mena, the report said.

JP Morgan earned $42.8m — the highest amount of investment banking fees in the first quarter in the region — and accounted for a 10 per cent share of the market. Goldman Sachs and Moelis took second and third spots with 7.6 per cent and 6.2 per cent market shares, respectively.

Debt capital markets (DCM) slid 79 per cent in the region to $7.9bn during the period. The UAE was ranked at the top for DCM activity with $5.3bn in related proceeds followed by Saudi Arabia with $1bn.

The largest bond offering of the year was from MDGH GMTN, wholly-owned by Mubadala Treasury Holdings Company, which raised $1.4bn.

“HSBC Holdings takes the top spot in the Mena debt capital markets league table with $935m in related activity or a 12 per cent market share. First Abu Dhabi Bank comes second with a 9 per cent market share,” the report said.

Updated: May 05, 2022, 4:30 AM