M&A transactions with Middle Eastern targets reach $14.7bn in H1

Thomson Reuters has released its investment banking analysis for the Middle East region for the first half (H1) of 2013.
During H1, Middle Eastern investment banking fees reached $356.6 million while equity issuance by Middle Eastern companies raised $3.2 billion from 12 issues. According to the report, Middle Eastern debt issuance reached $26.0 billion during H1 2013, a 40 percent increase over the same period last year.
Russell Haworth, managing director, Middle East & North Africa at Thomson Reuters, commented: "The value of announced M&A transactions with Middle Eastern targets reached $14.7 billion during the first half of 2013, 30 percent more than the $11.3 billion witnessed in the region during the same period last year, and marking the best first half since 2008. Bolstered by the $7.5 billion merger of two UAE state-owned aluminium producers, Materials was the most targeted industry during the first half, accounting for 64 percent of activity."
He added: "The UAE was the most active Middle Eastern country, being both the most targeted and the most acquisitive country in the region so far this year. India was the most popular target for outbound Middle Eastern M&A transactions, while the United States registered the highest value of inbound M&A deals targeting the Middle East. As sole adviser on the aluminum merger, Morgan Stanley topped the H1, 2013 announced any Middle Eastern involvement M&A ranking with $9.8 billion."
As regards Middle Eastern investment banking fees, Haworth pointed out that these fees reached $356.6 million during the first half of 2013, a 28 percent increase over the same period last year ($277.5 million), and the best first half for fees in the region since 2010. Completed M&A fees totaled $83.6 million, up 56 percent from the first six months of 2012 ($53.5 million), and accounting for 23 percent of the overall fee pool.
Fees from debt capital markets underwriting in the region hit $102.2 million, up 125 percent from $45.4 million during the same period last year, and marking the best first half for DCM fees in the Middle East of all time. Equity capital markets underwriting fees totaled $ 43.1 million, down 35 percent from the same period last year ($ 66.7 million), while fees from syndicated lending reached $127.6 million, up 14 percent over 2012 and accounting for 36 percent of the first half fee total.
Deutsche Bank earned the most investment banking fees in the Middle East during the first six months of 2013, a total of $ 27.4 million for a 7.7 percent share of the total fee pool. JP Morgan topped both the Middle Eastern completed M&A and the equity capital markets fee league tables. Deutsche Bank took first place in the Middle Eastern DCM fee ranking with a 14 percent cut, while Mitsubishi UFJ Financial Group topped the syndicated lending fee ranking during the first half.
Haworth noted that equity issuance by Middle Eastern companies raised $3.2 billion from 12 issues during H1, 2013, a 15 percent decline from the same period in 2012 ($3.7 billion), and marking the slowest first half since 2010. Initial public offerings, worth a combined total of $2 billion, accounted for 63 percent of ECM activity in the region. Three follow-on offerings totaling $702 million accounted for 22 percent, while convertible issuance accounted for the remaining 15 percent.
The largest Middle Eastern ECM transaction so far during 2013 was Asiacell Telecommunication’s IPO in February, which raised $1.3 billion. Bolstered by this deal, Iraq was the most active nation and telecoms was the most active sector in the Middle East during the first half of 2013. As sole bookrunner on the Asiacell IPO, Rabee Securities currently leads the 1H 2013 Middle Eastern ECM ranking with 40 percent of the market.
Haworth added: "Middle Eastern debt issuance reached $26 billion during the first half of 2013, a 40 percent increase over the same period last year, and the strongest first half in the region on record. Investment grade corporate debt totaled $20.8 billion and accounted for 80 percent of Middle Eastern DCM activity. International Islamic debt issuance reached $16.4 billion from 44 issues during the first six months of 2013, an increase of 6 percent from the same period in 2012. The most active nation for international Islamic debt issuance was Saudi Arabia with 37 percent, followed by Malaysia with 32 percent. HSBC took the top spot in the Middle Eastern bond ranking so far this year with a 16 percent share of the market."