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Rana Mamdouh
The value of trades announced in the first half of 2019 saw a 220.8% growth in the MENA region, according to a report by Ernst & Young.
According to the report, the value of transactions announced in the first half of 2019 amounted to $ 115.5 billion, up from $ 36 billion in the same period.
He pointed out that the volume of transactions decreased by 10.7% in the first half of the year, registering 216 transactions against 242 during the corresponding period.
The most significant transaction of the first half was the approval by Saudi Aramco to acquire 70% of Saudi Basic Industries Corp. (Sabic) from the Public Investment Fund, for an amount of 69.1 billions of dollars, he said.
According to the report, in the first half of 2019, state-owned enterprises took part in 55 transactions representing 25% of the total announced transactions, worth $ 104.5 billion, or 90% the total value of the transactions. Saudi Arabia, ADNOC and Abu Dhabi Investment Authority.
"In the Middle East and North Africa, Middle Eastern and North African companies have found innovative ways to increase their capital and have also accelerated the valuation of their portfolios," he said. Matthew Benson, Head of Middle East and North Africa Transaction Advisory Services at EY.
According to the EY report, 61% of executives surveyed in the region say their companies rate their portfolio every three months or less, which is higher than world leaders have indicated.
"With the increasing pace of portfolio valuations, a number of companies are considering winding up their non-core business, which will boost transaction activity."
"87% of Mina executives believe that the global economy is improving, compared to an average of 93% for all executives participating in the study worldwide, while 82% of respondents in the region MENA share the same feeling towards their local economies. "He said.
"We expect companies in the region to restructure their portfolios so that they can face future challenges, even if they pursue ambitious growth targets," he said.
Highlight five target sectors by transaction value
EY reported that the chemicals sector had the largest amount of transactions in the first half of 2019, or $ 69.3 billion, thanks to Saudi Aramco and SABIC, followed by the oil and gas sector with $ 14.2 billion. .
The health care sector recorded transactions worth $ 10.3 billion, while the banking and financial markets sector recorded transactions worth $ 5.1 billion. dollars, followed by the technology sector ($ 4.6 billion), including a $ 1.3 billion acquisition of Karim Networks US dollar.
"Mena's executives were more optimistic about improving the economy as they continued to monitor the changing geopolitical risks," said Anil Menon, head of merger advisory. and acquisitions and financial markets in the Middle East and North Africa at EY.
"Capital Confidence's report revealed that regional executives are looking for proactive strategic options to strengthen the competitive edge of their businesses and accelerate their growth at a time when technology is radically changing traditional business models. "
The value of local mergers and acquisitions transactions is based on huge offers
According to the report, local mergers and acquisitions transactions grew significantly in the first half of 2019: 111 transactions reached $ 79.3 billion, compared with 96 transactions worth $ 5.5 billion in the first half.
According to EY, two huge strategic deals resulted in local value-based transactions: a $ 69.1 billion transaction in the Saudi chemicals sector and a UA $ 4 billion bank and equity transaction United Arab Emirates.
In addition, the MENA region (Middle East and North Africa region) recorded 65 merger and acquisition transactions worth $ 21 billion, compared with 77 value-added transactions. $ 18.2 billion in the first half of 2018.
Strategic investments in sovereign wealth funds and state-owned enterprises, including the major operations of the Abu Dhabi Investment Authority (ADIA) and Saudi Aramco, pushed transactions to the Middle East and North Africa regions .
One of the most important contracts in the first half of the year was the acquisition of Karim Network for $ 3.1 billion, the largest technology contract in the Middle East to date, in which companies are discovering that technology local emerging market is itself vulnerable to acquisitions. International.
UAE records highest level of transactions received
The volume of mergers and acquisitions in the Middle East and North Africa (MENA) region declined in the first half of this year, with 40 transactions valued at $ 15.1 billion, compared with 69 transactions valued at $ 12.3 billion. USD.
The United Arab Emirates is at the forefront of mergers and acquisitions in the region, with 20 deals valued at US $ 14.4 billion.
The oil and gas sector was the main target of transactions in the region, with transactions valued at $ 10.8 billion.
The UAE recorded four out of six operations in the sector, including three major operations including the sale of the ADNC stake in its refining and pipeline operations.
"Significant amounts injected into M & A transactions in the region confirm the results of investment badysis in the Middle East and North Africa (MENA)," said Anil, head of mergers, acquisitions and acquisitions. financial markets in the Middle East and North Africa. We continue to believe that the time is right for strategic acquisitions in the region. "
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