Middle Eastern Mergers and Acquisitions value drops 22% in 9 mos of 2015
JEDDAH — Middle Eastern investment banking fees reached $480.5 million during the nine months of 2015, 22% less than the value recorded during the first nine months of 2014 and the lowest first nine-month total since 2012, according to latest estimates from Thomson Reuters / Freeman Consulting.
Nadim Najjar, Managing Director, MENA, Thomson Reuters, said: “The value of announced Mergers and Acquisitions (M&A) transactions with any Middle Eastern involvement reached $33.7 billion during the first nine months of 2015, 23% more than the value registered during the same period in 2014 and marking the best annual start since 2010.”
“Middle Eastern equity and equity-related issuance totaled $2.6 billion during the third quarter of 2015, a slight decline from the second quarter of this year. Middle Eastern debt issuance reached $16.1 billion during the third quarter of 2015, more than double the value raised during the previous quarter,” he added.
In respect to investment banking fees, not one Investment Banking component saw year-over-year percentage gains during the first nine months of 2015, with equity capital markets underwriting declining 3% compared to last year, while fees from completed M&A transactions totaled $177.6 million, a 1% decline from the first nine months of 2014, and accounting for 37% of the overall Middle Eastern investment banking fee pool, the highest first nine month share since records began in 1980. Syndicated lending fees totaled $174.4 million, down 36% from the first nine months of 2014, while fees from debt capital markets underwriting declined 42% year-on-year to $47.8 million.
HSBC earned the most investment banking fees in the Middle East during the first nine months of 2015, a total of $53.0 million for a 11.0% share of the total fee pool. HSBC topped both the completed M&A and the ECM underwriting fee rankings, while Nomura was first for DCM underwriting. Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking.
As for M&A deals, outbound M&A drove activity, up 57% from the first nine months of 2014 to reach $17.2 billion, the highest first nine month total since 2009. Qatar’s overseas acquisitions accounted for 55% of Middle Eastern outbound M&A activity, while acquisitions by Saudi Arabian and UAE companies accounted for 27% and 11%, respectively. Domestic and inter-Middle Eastern M&A decreased 2% year-on-year to $8.5 billion. Inbound M&A also saw a marked increased, up 154% to $4.6 billion. Energy & power was the most active sector, accounting for 31% of Middle Eastern involvement M&A. The largest deal with Middle Eastern involvement during the third quarter of 2015 was the $3.1 billion offer for the synthetic rubber business of Germany's Lanxess AG by Aramco Overseas Co BV. Bank of America Merrill Lynch topped the 9M 2015 announced any Middle Eastern involvement M&A league table with $7.8 billion.
Despite the quarterly decline of ECMs, Middle Eastern ECM increased 6% year-on-year to reach $5.5 billion during the first nine months of 2015, marking the best first nine months by proceeds raised since 2012. Ten initial public offerings raised $2.5 billion and accounted for 45% of first nine-month activity in the region. Follow-on and convertible offerings accounted for 15% and 40%, respectively. Abu Dhabi Islamic Bank PSJC raised $137.2 million from a follow-on stock offering in September, the largest equity offering in the region during the third quarter of 2015. HSBC took first place in the 9M 2015 Middle Eastern ECM ranking with an 18.3% market share.
As for Debt Capital Markets, despite the quarterly increase, first nine bond issuance in the region decreased 27% from last year to $24.4 billion during the first nine months f of 2015, marking the lowest first nine month total since 2011. The United Arab Emirates was the most active nation accounting for 70% of activity, followed by Egypt with 8%. International Islamic debt issuance declined 26% year-on-year to reach $21.4 billion during the first nine months of 2015. Nomura took the top spot in the Middle Eastern bond ranking during the first nine months of 2015 with a 33% share of the market. — SG
