The value of disclosed inbound deals in Mena increased to $10.6 billion in the first half of 2013, up from $5.1 billion during the same period last year, marking a rise of 108 per cent, a report said.

Outbound deal value dropped by 37 per cent from $10.5 billion in H1 2012 to $6.6 billion in H1 2013 and domestic deal value decreased by 13 per cent, according to the Mena M&A update from Ernst & Young (EY), a leading professional services firm.

Phil Gandier, Mena head of Transaction Advisory Services, EY said: “Seeing the value of inbound deals double since H1 2012 is an interesting trend, as both inbound and outbound deal flows have seen a reversal compared to a year ago, where outbound deal value was nearly double the value of inbound deals.”

“The UAE continues to play a key role in attracting investment to the region being the target country focus of 25 per cent of inbound deal volume for H1 2013.

“This overall positive improvement of inbound investment could signify a continued level of confidence in the Mena market irrespective of the continued political uncertainty in the region.”

The majority of inbound deal value went to the telecommunications sector mainly due to the proposed acquisition of a large parcel of shares in Egypt's Orascom Telecom Holding by Baskindale Limited for $6.4 billion. This offer was subsequently withdrawn but had it completed, it would have been the largest deal in H1 2013.

The largest volume of domestic deals was in the UAE, representing 25 per cent of domestic deals in H1 2013, followed by Saudi Arabia representing 19 per cent of domestic deal volume in Mena.

“Both the volume and value of inbound and outbound deals between $100 million and $500 million have increased during the first half of this year compared to H1 2012. Coupled with a decrease in the number of deals less than $100 million, this is a healthy improvement for the Mena M&A market whereby larger deal values signify an improving capital market which we may see continue over the remainder of the year,” added Gandier.

Top 10 announced deals in H1 2013 by value

Four of the top 10 announced deals by value in H1 2013 were announced acquisitions by companies in Qatar.

The top announced deal in H1 2013 was Baskindale Limited’s acquisition of Orascom Telecom Holding in Egypt for $6.4 billion, followed by the acquisition by Sorouh Real Estate in the UAE of Aldar Properties PJSC for $2.0 billion, Netherlands based OCI N.V acquisition of Orascom Construction Industries in Egypt for $1.9 billion and Qatar Foundation QSC acquisition of Bharti Airtel’s in India for $1.3 billion.

Mena PE/SWF Activity

Out of 206 announced deals in H1 2013, 39 comprised SWF/PE deals (19 per cent of all announced deals). The 39 SWF/PE deals comprised $4.2 billion of total announced value in H1 2013. The largest SWF deal was the acquisition of Bharti Airtel in India by Qatar Foundation QSC for $1.3 billion. The majority of SWF/PE activity was in the telecommunications sector.

“SWFs have historically preferred to invest in outbound deals, however in the first half of this year, 44 per cent of SWF/PE deals were domestic deals compared to 41 per cent outbound deals, showing a more balanced distribution between domestic and outbound deals,” concluded Gandier.

“It will be interesting to see if this trend continues in the future as Mena countries look within themselves for investment opportunities.” – TradeArabia News Service