The value of announced merger and acquisition (M&A) transactions with any Middle Eastern involvement reached $5.7 billion during the first quarter of 2014, 15 percent less than the $6.8 billion witnessed during the same period last year, marking the lowest first quarter total in the region since 2004, Thomson Reuters said Tuesday in its quarterly investment banking analysis for the Middle East region. The low first quarter total was largely impacted by an 85 percent decline in domestic and inter-Middle Eastern M&A which totaled just $674 million, the lowest first quarter total since 2006. Nadim Najjar, Managing Director, Middle East, Africa, and Russia / CIS, said: “Outbound M&A drove activity, up 147 percent from this time last year to total $3.5 billion. Saudi Arabian overseas acquisitions accounted for 59 percent of Middle Eastern outbound M&A activity. Inbound M&A also increased, climbing 171 percent to $506 million.” The largest deal during the first quarter was Aramco’s purchase of a $2.0 billion stake in South Korea’s petroleum and refinery company, S-Oil Corp. Boosted by this deal, Energy & Power was the most targeted sector, accounting for over half of first quarter activity. Morgan Stanley topped the 1Q 2014 announced any Middle Eastern involvement M&A league table with $740 million.” Middle Eastern debt issuance reached $4.0 billion during the first quarter of 2014, down 67 percent from the same period in 2013 and the lowest quarterly total since the third quarter of 2011. It is the slowest annual start for debt capital markets activity in the region since 2009. Investment grade corporate debt totaled $3.3 billion and accounted for 84 percent of the first quarter total. “The United Arab Emirates was the most active nation accounting for 41 percent of activity, followed by Saudi Arabia with 38 percent. International Islamic debt issuance declined 34 percent year-on-year to reach $6.4 billion, the lowest first quarter total since 2011. JP Morgan took the top spot in the Middle Eastern bond ranking during the first quarter of 2014 with a 17 percent share of the market,” Najjar said. Middle Eastern investment banking fees reached $120.3 million in the first quarter of 2014, down 17 percent from the previous quarter. Najjar said “Middle Eastern companies raised $1.0 billion from 2 initial public offerings during the first quarter of 2014, a 37 percent decline in IPO activity from the same period in 2013 ($1.6 billion). There were no follow-on or convertible offerings in the region during the first quarter so overall, ECM activity fell 46 percent. The larger of the two IPOs was the $905 million offering from Mesaieed Petrochemical Holding, a unit of state-owned Qatar Petroleum. It was Qatar’s first IPO since 2010. Egypt’s Arabian Cement Company raised $109 million in March. As sole bookrunner on the Mesaieed Petrochemical Holdings IPO, Qatar National Bank took first place in the 1Q 2014 Middle Eastern ECM ranking.” The Middle Eastern investment banking fees reached $120.3 million during the first quarter of 2014, down 17 percent from the previous quarter and a two percent decline compared to the first quarter of 2013. He added: “Fees from completed M&A transactions totaled $46.4 million, up 19 percent from the same period in 2013, and accounting for 39 percent of this year’s overall Middle Eastern fee pool. Equity capital markets underwriting fees totaled $39.6 million, more than twice the amount registered during the first quarter of 2013 ($17.4 million) and marking the best annual start for ECM fees in the Middle East since 2008. ECM fees account for 33 percent of the fee pool, the highest first quarter share since 2006.” Najjar pointed out that the fees from debt capital markets underwriting declined 47 percent year-on-year to $17.4 million, while syndicated lending fees fell 49 percent to $16.9 million. Lazard earned the most investment banking fees in the Middle East during the first quarter of 2014, a total of $28.8 million for a 24 percent share of the total fee pool. Lazard topped the Middle Eastern completed M&A fee league table, while Qatar National Bank was first in the ECM underwriting fee rankings. JP Morgan and Samba Financial Group took the top spots in the Middle Eastern DCM and loans fee rankings, respectively.
Middle East M&A Value Drops 15% To $5.7 Billion
The value of announced merger and acquisition (M&A) transactions with any Middle Eastern involvement reached $5.7 billion during the first quarter of 2014, 15 percent less than the $6.8 billion witnessed during the same period last year, marking the lowest first quarter total in the region since 2004, Thomson Reuters said Tuesday in its quarterly investment banking analysis for the Middle East region. The low first quarter total was largely impacted by an 85 percent decline in domestic and inter-Middle Eastern M&A which totaled just $674 million, the lowest first quarter total since 2006. Nadim Najjar, Managing Director, Middle East, Africa, and Russia / CIS, said: “Outbound M&A drove activity, up 147 percent from this time last year to total $3.5 billion. Saudi Arabian overseas acquisitions accounted for 59 percent of Middle Eastern outbound M&A activity. Inbound M&A also increased, climbing 171 percent to $506 million.” The largest deal during the first quarter was Aramco’s purchase of a $2.0 billion stake in South Korea’s petroleum and refinery company, S-Oil Corp. Boosted by this deal, Energy & Power was the most targeted sector, accounting for over half of first quarter activity. Morgan Stanley topped the 1Q 2014 announced any Middle Eastern involvement M&A league table with $740 million.” Middle Eastern debt issuance reached $4.0 billion during the first quarter of 2014, down 67 percent from the same period in 2013 and the lowest quarterly total since the third quarter of 2011. It is the slowest annual start for debt capital markets activity in the region since 2009. Investment grade corporate debt totaled $3.3 billion and accounted for 84 percent of the first quarter total. “The United Arab Emirates was the most active nation accounting for 41 percent of activity, followed by Saudi Arabia with 38 percent. International Islamic debt issuance declined 34 percent year-on-year to reach $6.4 billion, the lowest first quarter total since 2011. JP Morgan took the top spot in the Middle Eastern bond ranking during the first quarter of 2014 with a 17 percent share of the market,” Najjar said. Middle Eastern investment banking fees reached $120.3 million in the first quarter of 2014, down 17 percent from the previous quarter. Najjar said “Middle Eastern companies raised $1.0 billion from 2 initial public offerings during the first quarter of 2014, a 37 percent decline in IPO activity from the same period in 2013 ($1.6 billion). There were no follow-on or convertible offerings in the region during the first quarter so overall, ECM activity fell 46 percent. The larger of the two IPOs was the $905 million offering from Mesaieed Petrochemical Holding, a unit of state-owned Qatar Petroleum. It was Qatar’s first IPO since 2010. Egypt’s Arabian Cement Company raised $109 million in March. As sole bookrunner on the Mesaieed Petrochemical Holdings IPO, Qatar National Bank took first place in the 1Q 2014 Middle Eastern ECM ranking.” The Middle Eastern investment banking fees reached $120.3 million during the first quarter of 2014, down 17 percent from the previous quarter and a two percent decline compared to the first quarter of 2013. He added: “Fees from completed M&A transactions totaled $46.4 million, up 19 percent from the same period in 2013, and accounting for 39 percent of this year’s overall Middle Eastern fee pool. Equity capital markets underwriting fees totaled $39.6 million, more than twice the amount registered during the first quarter of 2013 ($17.4 million) and marking the best annual start for ECM fees in the Middle East since 2008. ECM fees account for 33 percent of the fee pool, the highest first quarter share since 2006.” Najjar pointed out that the fees from debt capital markets underwriting declined 47 percent year-on-year to $17.4 million, while syndicated lending fees fell 49 percent to $16.9 million. Lazard earned the most investment banking fees in the Middle East during the first quarter of 2014, a total of $28.8 million for a 24 percent share of the total fee pool. Lazard topped the Middle Eastern completed M&A fee league table, while Qatar National Bank was first in the ECM underwriting fee rankings. JP Morgan and Samba Financial Group took the top spots in the Middle Eastern DCM and loans fee rankings, respectively.