The value of merger and acquisitions (M&As) in the Mena region touched $9 billion during the first quarter (Q1) of 2015, reaching its median level of the last six years, a report said.

Such trend is reinstating the large deal sizes witnessed during the pre-2008 years, although the gap remains large to bridge, added the report released by Bureau van Dijk and Mena Research Partners.

From a geographic perspective, deal activity remains driven by a strong performance in GCC coupled with an ongoing pick-up in selected Arab Spring countries like Egypt and Morocco, the report noted.

In fact, the GCC region continues to account for the bulk of the regional deal flow, with 42 per cent and 63 per cent respectively of the announced value and the volume of completed deals during Q1 2015.

This is in line with the general trend witnessed during the years 2013 and 2014, in an indication of larger deals being closed outside the Arabian Gulf countries. All in all, larger ticket sizes are more common in the GCC, as opposed to a larger number of smaller deals in other Mena countries.

Lisa Wright, Zephyr director said: “After a recovery in Q4 2014 the opening three months of 2015 represent another improvement for the Mena region in terms of aggregate deal value. In all there were 120 deals worth a combined $9 billion closed in Q1 2015.”

“As is often the case, a small number of high value transactions accounted for the bulk of this activity. Three deals worth in excess of USD 2,000 million helped push Q1 higher to mark a second consecutive increase in value, once again proving that one or two large deals can often make all the difference when it comes to deciding whether a quarter’s results are disappointing or promising,” she added.

Cyclical sectors continued to be a major focus for the acquirers. During Q1 2015, sectors like banks, construction and service companies continued to account for a substantial share of the regional completed M&As, prolonging the previous years’ trend.

In terms of deal attitude, minority acquisitions accounted for most of the number of the regional deals during Q1 2015, sustaining their lead over the past years relative to majority deals. This is in line with the general perception that regional investors are less reluctant to give up control of their business.

Foreign acquirers have remained one major component in the Mena M&A market. During 1Q2015, they have accounted for 53 per cent of the number of completed deals, in line with the number witnessed during the past five years.

These numbers reflect a confidence of global players in a large number of regional economies and their long-term fundamentals. In return, it offers some interesting exit options for local investors.

Mena Research Partners (MRP) is a research outsourcing company offering customized business intelligence to corporations in the Mena region.

Bureau van Dijk (BvD) is one of the world’s leading providers of business and M&A intelligence. BvD is best known for its range of international company information products that combine multiple high-quality data sources with flexible software to allow users to manipulate data for research, marketing intelligence and analysis. – TradeArabia News Service