The value of announced deals with disclosed value in the MENA region increased by 220.8 percent to $115.5 billion in H1 2019, up from $36 billion in H1 2018, according to the EY H1 MENA M&A report. However, deal volume witnessed a decrease of 10.7 percent, with 216 announced deals in H1 2019, down from 242 deals recorded in H1 2018.
The largest deal during H1 2019 was Saudi Aramco agreeing to acquire a 70 percent stake in SABIC worth $69.1b from PIF.
In H1 2019, state-owned entities were involved in 55 deals (25 percent of total deals) amounting to $104.5 billion, 90 percent of the total deal value, including megadeals involving Saudi Aramco, ADNOC and ADIA.
Matthew Benson, MENA transaction advisory services leader, EY, said: “ The EY Capital Confidence Barometer (CCB) report indicates that 61 percent of MENA executives say their companies are reviewing their portfolios every quarter or more frequently — more often than global executives.”
Benson said: “With more frequent portfolio reviews, several non-core businesses are set aside for divestment thereby fueling deal activity.”
He added: “A further 87 percent of MENA executives believe the global economy is improving, compared to 93 percent on average across all executives in the study, globally, while 82 percent share a similar sentiment about their domestic economy here in the MENA region. Looking ahead, we expect MENA companies to continue to reshape their portfolios to remain resilient to potential headwinds on the horizon, even as they actively pursue their ambitious growth objectives.”
