MENA M&A Market Stalls, During 2Q2015, Well Behind Its 3-Year Rebound

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Lisa Wright, Zephyr director said: “After a positive showing in the first quarter of this year, Q2 2015 has been disappointing in terms of aggregate deal value in the MENA region. In all 120 deals worth USD 2,883 million have been closed in the MENA region in the second quarter of 2015. The decline can be attributed to a lack of high value deals; in the period under review only one deal surpassed USD 1,000 million, a USD 1,100 million purchase of a 5 per cent stake in Abu Dhabi Company for Onshore Oil Operations by Inpex. This once again illustrates the difference a high-value transaction can make.”

Cyclical sectors continued to be a major focus for the acquirers. During 1H2015, sectors like banks, construction and service companies continued to account for a substantial share of the regional completed M&As, prolonging the previous years’ trend.

In terms of deal attitude, minority acquisitions accounted for most of the number of the regional deals during 1H2015, sustaining their lead over the past years relative to majority deals. This is in line with the general perception that regional investors are less reluctant to give up control of their business.

Foreign acquirers have remained one major component in the MENA M&A market, although depicting a regression since 2010. During 1H2015, they have accounted for 49% of the number of completed deals, slightly lower than the numbers witnessed during the past 5 years. On one hand, this reflects a confidence of global players in a large number of regional economies and, on the other, a step backwards in the overall investor confidence in selected countries. All in all, it still offers some interesting exit options for local investors.

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