Mideast M&A transactions reach $5.1b in first quarter

Middle Eastern fees reached $143.5 million during the first quarter of 2013, a 49 per cent increase over the same period last year ($96.3 million). Equity issuance by Middle Eastern companies raised $2.3 billion from six issues during the first quarter of 2013, more than five times the amount raised during the same period in 2012 ($453 million).

“The value of announced M&A [mergers and acquisitions] transactions with Middle Eastern targets reached $5.1 billion during the first quarter of 2013, 10 per cent less than the $5.7 billion witnessed in the region during the same period last year,” said Russell Haworth, managing director for the Middle East and North Africa at Thomson Reuters.

“Bolstered by OCI’s $2.2 billion mandatory tender offer to acquire Orascom Construction Industries, materials was the most targeted industry during the first quarter, accounting for 43 per cent of activity.”

“Egypt was the most active Middle Eastern country, being both the most targeted and the most acquisitive country in the region so far this year. China was the most popular target for outbound Middle Eastern M&A transactions, followed by Greece, while the United Kingdom registered the highest value of inbound M&A deals targeting the Middle East.”

Citi topped in the first quarter in announced Middle Eastern-involvement M&A ranking with $2.6 billion, followed closely by Barclays with $2.5 billion. Advisors on the Orascom deal — Barclays, Citi, CI Capital, Allen & Co and Rabobank — shared first place in the Middle Eastern-target M&A rankings.

In respect to Middle Eastern investment banking fees, Haworth pointed out that year-on-year fee increases were seen across asset classes. Completed M&A fees totalled $47.6 million, up 81 per cent from the first quarter of 2012 ($26.3 million), and accounting for 33 per cent of the overall fee pool. Fees from debt capital markets underwriting in the region hit $44.1 million, up 48 per cent from the $29.8 million seen during the first quarter of 2012.

He noted that ECM underwriting fees totalled $16.7 million, nearly three times the total seen during the same period last year ($5.9 million), while fees from syndicated lending reached $35.1 million, up three per cent over 2012 and accounting for 24 per cent of the quarter’s fee total.

JPMorgan topped the Middle Eastern-completed M&A fee ranking during the first quarter of 2013, earning 21 per cent of the fee pool. ANB Invest took first place in the Middle Eastern ECM fee ranking with a 40 per cent cut. HSBC topped both the debt capital markets and syndicated lending fee league tables during the first quarter.

Haworth indicated that initial public offerings, worth a combined total of $1.6 billion, accounted for 70 per cent of ECM activity in the region.

— business@khaleejtimes.com