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ALKESH SHARMA / Emirates Business
Mergers and Acquisitions (M&A) activity is the key to fight financial fluctuations and emerge as a successful business model in this region.
The real estate and construction sector, particularly in the UAE, has witnessed a sharp surge in the business owing to M&A deals in the last few years.
According to the Al Masah Capital Limited report titled ‘MENA M&A Industry’, UAE accounted for upto 34 deals in the real estate and construction sector in the Middle East and North Africa (MENA) region during 2010-15, while the total number of deals in the region was 239. However, in terms of volume, the UAE raked in around 21.1 percent ($6,236.3 million) of the region during this period.
“Mergers and acquisitions represent the perfect business preposition in all the circumstances as they add further stimulus in the market. Many businessmen relate them with the situation when investors do not have full confidence in the market or when economy is going through a gloomy phase. But past results have proved that they are the win-win situation for all stakeholders during all phases of ups and downs,†Juma Al Mohammed, Chief Executive Officer of Rale General Maintenance, Abu Dhabi, told Emirates Business.
“We are also in the process of merging with a leading real estate company of Abu Dhabi and to start a couple of majestic construction projects by the end of this year,†added Mohammed.
In total, deals worth $29,512.8 million were recorded in the MENA real estate and construction sector from 2010-15 and 2014 turned out to be a landmark year with $10,674.7 million worth of deals registered from 51 pacts. However, UAE was at number third spot with 34 deals and it was preceded by Egypt (66 deals) and Kuwait (39 deals).
“They are the best mediums for the sharing of knowledge tools and expertise among enterprises. In this kind of business model, one group will supplement the other and usually there is no sense of competition. We have seen many real estate companies comfortably braving the pangs of economic meltdown by adopting the foolproof model of M&A,†said a senior executive, working with a consultancy company in Dubai, requesting anonymity.
In terms of the volume of the real estate and construction deals, as per the Al Masah Capital Limited report, Qatar dominated the region with 39.5 percent share ($11,661.6 million), followed by Egypt ($8,016 million) and the UAE ($6,236.3 million) during the period of 2010-15.
Notably, mergers and acquisitions have resulted into some big projects in the Emirates in the recent past. In one of the latest development, Three60 Communities, a subsidiary of Eltizam Asset Management Group (one of the UAE’s leading asset
management companies), sealed a merger with Novus Community Management for a new Dubai entity, creating UAE’s largest privately owned community management company.