Mena’s M&A transactions hit $14.8b in first quarter of 2020

Dubai / Emirates Business

The value of announced mergers and acquisitions (M&A) transactions with any Middle East and North Africa (Mena) involvement reached $14.8 billion during the first three months of 2020 according to report released by Refinitiv on Thursday.
According to the report, the investment banking fees in Mena reached an estimated $188.8 million during the first quarter of 2020, up 11% from last year’s slow start, with triple-digit gains recorded across M&A advisory and equity underwriting fees, according to Refinitiv on Thursday released the 2020 first quarter investment banking analysis for the Middle East.
Advisory fees earned from completed M&A transactions generated $58.4 million, up 266% year-on-year and the highest first quarter total since 2017.
Equity capital markets underwriting fees more than tripled to reach $15.9 million, while bond underwriting fees declined 47% to a four-year low of $45.4 million. Syndicated lending fees increased 9% to $69.1 million.
The financial and industrial sectors each accounted for 25% of total investment banking fees earned in the region during the first quarter of this year, and almost half of all fees were generated by companies located in the United Arab Emirates. Jefferies LLC earned the most investment banking fees in the region during the first quarter of 2020, a total of $27.8 million or a 14.7% share of the total fee pool.
The number of deals increased 4% over same period. Monthly M&A has increased in value for the third consecutive month, with March 2020’s $6.1 billion marking the highest monthly total in 11 months. At the beginning of March, Austrian oil company OMV announced that it would increase its stake in plastics maker Borealis in a deal worth $4.7 billion, the largest deal of the quarter.
Although second highest first quarter total in the last decade, domestic M&A registered a 92% decline from last year to $6.9 billion, again due to the Aramco / Sabic deal. Inbound M&A, involving an acquiror from outside of the region.
Deals in the industrials sector accounted for 43% of Mena target M&A activity during the first quarter of 2020. The United Arab Emirates was the most targeted nation, followed by Egypt.
Barclays topped the any Mena involvement announced M&A financial advisor league table during the first quarter of 2020 with a 49% market share.

Mena equity and equity-related issuance totalled $782.9 million during the first quarter of 2020, more than four-times the value recorded during the same period last year, despite a 50% decline in the number of deals. One initial public offering was recorded during the first quarter. Saudi Arabian private healthcare operator, Dr Sulaiman Al Habib Medical Group, raised $699.7 million on the Saudi Stock Exchange at the beginning of March.
EFG Hermes, Jadwa Investment Co, and Riyadh Bank Ltd shared first place in the MENA ECM league table during the first quarter of 2020.
As to debt markets, Mena debt issuance totalled $19.5 billion during the first quarter of 2020. After a strong start, with over $9 billion raised in both January and February, March issuance slowed to just $571.9 million, marking the lowest monthly total since August 2019.
Saudi Arabia was the most active issuer nations with $9.9 billion in bond proceeds, respectively. Saudi Arabia’s $4.9 billion bond sale in January was both the largest Mena bond sale and the only government bond sale in the region during the first quarter of 2020. Standard Chartered took the top spot in the Mena bond underwriter ranking during Q1 2020 with $5.6 billion of related proceeds, or a 29% market share.