Telecoms, media and technology (TMT) companies in the UAE are the most likely candidates for mergers and acquisitions within the Middle East this year, according to intelligence service provider Mergermarket.
Twenty-seven companies within the TMT sector are either up for sale or likely to come to market before the end of the year, said Ruth McKee AlGhamdi, the head of Mena at Mergermarket, with UAE-based media houses and software development companies the most likely sale candidates.
Mrs McKee AlGhamdi was speaking at Mergermarket’s 2016 Middle Eastern M&A and Private Equity Forum in Dubai yesterday.
Energy, mining and utilities is forecast to be the next most active M&A sector in the Middle East this year, with 15 companies likely to be available for sale throughout the year, although valuations are set to be lower than 2015 multiples, according to Mergermarket data.
Challenging economic conditions brought on by lower oil prices had not significantly affected the Middle East M&A climate, with a 43 per cent year-on- year increase in domestic deal volume during the first quarter of the year, according to Phil Gandier, Mena transaction advisory services leader for EY.
However, tightening economic conditions resulted in increased scrutiny on revenue projections within deals, Mr Gandier said on the sidelines of the Mergermarket event.
“Although low oil prices are having a varying impact on Mena countries economically, they are having little impact on M&A strategy, as Mena executives continue their steadfast pursuit of deal-making,” said Mr Gandier.
“We expect disruptive trends, such as changes in consumer behaviour and transformational deals that enable Mena companies to adapt to shifting customer sentiment, to dominate M&A activity in 2016.”
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