CCG M&A volumes increase 39% in H1 2021


The volume of mergers and acquisitions in the GCC grew by 39% per year in the first half of this year as appetite for investment returned despite the uncertainty induced by the coronavirus.

However, M&A deals in the region fell to $ 14 billion during the period, down 47% per year, according to the report compiled by the Boston Consulting Group in collaboration with the German University of Paderborn.

This annual analysis of GCC’s mergers and acquisitions landscape is based on BCG’s M&A database of more than 4,500 transactions from January 1990 to June 2021.

“Despite the current crisis, the impact on ongoing M&A transactions has been found to be temporary, with a substantial recovery in volumes this year after a period of intense difficulty not so long ago,” said Ronald Maalouf, Managing Director and Associate of BCG.

“The result for the region is attributed to a higher volume of transactions, as well as corporate decision makers, investors and brokers operating across the region. Their adaptability has collectively enabled the M&A segment to rebound favorably overall, although deal value must now keep pace with rebounding deal volume… ”

Stock markets in the UAE and Saudi Arabia are experiencing a rush for initial public offerings as companies tap into liquidity markets to fuel their post-pandemic growth. Some of the top listings in the UAE include Adnoc Drilling, satellite operator Yahsat and Fertiglobe. Clean energy company Acwa Power and Saudi Tadawul Group have been the kingdom’s two top listings over the past two months.

The volume of mergers and acquisitions in the Middle East grew 59% per year in the first half of this year, according to a study by law firm Baker McKenzie in September. The region recorded 307 M&A deals in the first six months of the year, 48% more than the number of deals closed in the second half of 2020, the law firm said.

Despite the current crisis, the impact on ongoing mergers and acquisitions has been temporary

Ronald Maalouf, Managing Director and Partner, BCG

The global economy has rebounded strongly from the pandemic, which severely disrupted economic dynamics last year. The International Monetary Fund forecast the global economy to grow 5.9% in 2021, after contracting 3% last year, and kept its 2022 projection unchanged at 4.9%.

The value of transactions in the UAE has grown sharply alongside transaction volume in the first eight months of 2021, registering a total of 100 transactions amounting to $ 11 billion, according to BCG.

This is mainly due to a rebound in big deals, with four of those deals valued at more than $ 1 billion in total, contributing to a 433% increase from the first eight months of 2020, according to the report.

Meanwhile, Saudi Arabia saw a decline in transaction value in the first eight months of 2021, despite a 13% increase in transaction volume, BCG revealed.

The decrease in the value of transactions is an indication of the decrease in large-scale transactions the kingdom has seen in previous years, such as the acquisition of Sabic by Saudi Aramco in 2019 and the merger of the National Commercial Bank with Samba Financial Group in 2020, according to the report.

In Qatar, the value of transactions declined in the first eight months of 2021, although the volume of transactions increased more than five times compared to the same period last year.

“These examples illustrate that the value of the deal in the GCC will follow a rebound volume from the pandemic,” said Ihab Khalil, CEO and partner of BCG.

“This will stem from several factors that continue to occur in the region, such as increasingly favorable economic conditions, industrial and regional consolidations and widespread sustainability efforts. That being said, the coming period is a time when value creation can also be achieved in other areas, especially through divestitures. “

Updated: December 12, 2021, 13:27


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