The value of Middle Eastern mergers and acquisitions (M&A) reached $50.3 billion in 2014, finishing 23 per cent up on 2013 and the highest annual total since 2010, a report said.

Outbound M&A drove 2014 activity, up 74 per cent from 2013 to reach $26.0 billion, the highest annual total since 2009, added the annual investment banking analysis for the Middle East region released by Thomson Reuters, a leading source of intelligent information for businesses.

Qatar’s overseas acquisitions accounted for 65 per cent of Middle Eastern outbound M&A activity, while acquisitions by UAE and Saudi Arabian companies accounted for 15 per cent and 9 per cent, respectively.

Domestic and inter-Middle Eastern M&A declined 12 per cent year-on-year to $14.0 billion during 2014.  Inbound M&A also declined, falling 30 per cent to $4.2 billion.

The value of announced merger and acquisition (M&A) transactions with Middle Eastern involvement reached $22.7 billion during the fourth quarter of 2014, marking the highest quarterly total since the first quarter of 2008, said Nadim Najjar, managing director, Mena, Thomson Reuters.

The value is more than double the value registered during the previous quarter, he added.

“Middle Eastern equity and equity-related issuance totalled $11.4 billion in 2014, a 173 per cent increase in activity from 2013 ($4.2 billion), while Middle Eastern debt issuance reached $3.5 billion during the fourth quarter of 2014, half the value raised during the third quarter,” Najjar said.

According to estimates from Thomson Reuters / Freeman Consulting, Middle Eastern investment banking fees reached $147.25 million during the fourth quarter of 2014, 19 per cent more than the value recorded during the previous quarter.

Despite the uptick in the investment banking fees during the last quarter, fees earned during 2014 declined 3 per cent from $776.2 million during 2013, to $751.7 million. Equity capital markets (ECM) underwriting fees totalled $125.1 million in 2014, up 163 per cent from the previous year ($47.5 million), and marking the best annual total for ECM fees in the Middle East since 2009.

ECM fees accounted for 17 per cent of this year’s overall Middle Eastern fee pool.

Fees from completed M&A transactions totalled $159.2 million, down 5 per cent from 2013 and accounting for 21 per cent of the fee pool.  Fees from debt capital markets underwriting declined 27 per cent year-on-year to $86.8 million, while syndicated lending fees fell 21 per cent to $233.4 million.

HSBC earned the most investment banking fees in the Middle East during 2014, a total of $56.9 million for a 7.6 per cent share of the total fee pool.  Lazard topped the Middle Eastern completed M&A fee league table, while HSBC was first in the ECM and DCM underwriting fee rankings.  Mizuho Financial Group took the top spot in the Middle Eastern loans fee ranking.

The largest deal with Middle Eastern involvement in 2014 was the $9.1 billion offer for Songbird Estates, the owner of London's Canary Wharf financial district, by The Qatar Investment Authority and Canada’s Brookfield Property Partners.  Boosted by this deal, real estate was the most active sector in 2014, accounting for 38 per cent of Middle Eastern involvement M&A.

Citi topped the 2014 announced any Middle Eastern involvement M&A league table with US$15.4 billion.

In respect to Equity Capital Markets, thirteen initial public offerings raised US$7.9 billion and accounted for 69 per cent of activity in the region.  Follow-on and convertible offerings accounted for 22 per cent and 9 per cent, respectively.

Saudi Arabia’s National Commercial Bank raised $6.0 billion from its initial public offering in November.  It holds the record for the largest Middle Eastern IPO of all-time, and was 2014's second biggest initial public offering after Alibaba. HSBC took first place in the 2014 Middle Eastern ECM ranking followed by GIB Capital and Qatar National Bank.

Debt Capital Markets were active as well. Bonds issued during 2014 decreased 6 per cent from 2013, to $37.0 billion. Investment grade corporate debt totalled $33.4 billion and accounted for 90 per cent of the annual total.

The UAE was the most active nation accounting for 48 per cent of activity, followed by Saudi Arabia with 30 per cent.  International Islamic debt issuance increased 18 per cent year-on-year to reach $39.1 billion. HSBC took the top spot in the Middle Eastern bond ranking during 2014 with a 14 per cent share of the market. – TradeArabia News Service