Lisa Wright, Zephyr director said: “The third quarter of 2015 represented a slight decline on Q2 2015 for the MENA region as value dropped from USD 2,999 million to USD 2,668 million, in line with the overall global trend for the quarter. Conversely, volume increased quarter-on-quarter from 129 to 163. The lack of a very high value transaction appears to be the reason for the drop in value; Q3’s highest deal value was USD 314 million. Compared with recent quarters, the value of the region’s largest deal in Q3 was low. Previous quarters have seen transactions worth in excess of USD 2,000 million announced, thereby highlighting the importance of an individual deal’s consideration to a quarter’s overall performance.”
Cyclical sectors continued to be a major focus for the acquirers. During 9m2015, sectors like construction and chemicals have picked relative to others, while the banking sector consolidation paused compared to previous years.
In terms of deal attitude, minority acquisitions accounted for most of the number of the regional deals during 9m2015, 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, depicting a minor regression to 2014 levels. During 9m2015, they have accounted for 52% of the number of completed deals, slightly lower than the average numbers witnessed during the past 5 years. On one hand, this reflects a confidence of global players in a large number of regional economies and, on the other, a step backwards in the overall investor confidence in selected countries. All in all, it still offers some interesting exit options for local investors.
