The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
DUBAI / Emirates Business
The value of announced deals with disclosed value in the Mena region increased by 105% to $10 billion (AED36.7 billion) in third quarter of 2018 from $4.9 billion in the same period last year, according to the EY Q3 Mena M&A report.
Deal value remained consistent year-on-year. As many as 107 deals were announced in Q3 this year compared with 110 deals in Q3 2017, a decrease of 3%.
The GCC deals represented 79% ($7.9 billion) of the total Mena announced deal value, and 73% of deal volume (78 GCC announced M&A deals). The acquisition of Arlanxeo Holding, a chemicals company in the Netherlands, for $1.6 billion by Saudi Aramco was the largest deal of Q3 2018.
Anil Menon, Mena M&A and ECM Leader, EY, said, “In the first three quarters of 2018, regional M&A activity was largely driven by sector consolidation play led
by strategic investors. Portfolio optimisation and preserving capital has also become a corporate imperative. Executives are also assessing a number of capital allocation strategies to mitigate risks and boost returns.
A majority indicate they are zeroing in on improving working capital management and investing in existing operations.â€
While announced cross border (inbound and outbound) activity was on par with Q3 2017, deal value increased fivefold, valued at $9 billion in Q3 2018 compared to $1.5 billion during same period in 2017. Outbound deals increased from $1.5 billion in Q3 2017 to $6.4 billion in Q3 this year and inbound deals grew from $28.6 million to $2.6 billion.
The third quarter of 2018 witnessed significant cross border activity from sovereign wealth funds with deal value of $2.5 billion co-mpared to $0.3 billion in Q3 2017 across sectors. In contrast, domestic deals dropped from $3.3 billion in Q3 2017 to $1 billion in Q3 2018 due to focus strategic players on cross border transactions.
The number of high-ticket deals increased significantly in Q3 2018; eight deals valued at over $500 million were announced in Q3 2018, compared to two during same period last year, leading to an overall increase in average deal size.