The total volume of mergers & acquisition (M&A) deals in the Middle East and North Africa (MENA) region posted a healthy 36 percent growth in the first half, with the UAE and Saudi Arabia topping the list, Ernst and Young (E&Y) said in its "H1 2011 MENA M&A Update." The value grew by 8 percent to $20 billion in the said period compared to deals worth $18.5 billion announced in the same period last year, the E&Y said. The second quarter saw deal volumes remain consistent, marginally declining to 96 from 98 deals in the previous quarter of 2011. Deal value, however, declined significantly between quarters, falling 59 percent from $14.1 billion in first quarter to $5.8 billion in the second quarter. In the region, the UAE and Saudi Arabia remained the most active with largest number of transactions in second quarter. The UAE boasted of 14 deals during the period, while Saudi Arabia was close behind with 13. Phil Gandier, MENA Head of Transaction Advisory Services, E&Y, said : "Saudi Arabia also ranked highest in the region in terms of deal value, comprising approximately 42 per cent ($709 million) of the total disclosed deal value in the domestic space in second quarter of 2011. The UAE followed at 22 percent ($378 million) and Kuwait at 16 percent ($273.1 million)." Outbound deals beat inbound and domestic in terms of value, the report said. The average deal size of announced M&A deals in the first half of 2011 came in at $240.8 million, at similar levels of the same period last year when average deal value was $215 million. The average domestic deal size increased by 31 percent, from $127 million in the first half of 2010 to $166.4 million this year. In the cross-border segment, average size of inbound and outbound deals in H1 2011 increased by 22 per cent and by 23 per cent respectively, as compared to H1 2010. Sectors that attracted most inbound deal activity in second quarter of 2011 were diversified industrial products (6 deals worth $280 million) and professional firms & services (5 deals). Domestic transactions by volume were about 50 percent of total announced deals in second quarter of 2011, outnumbering inbound and outbound deal activity. In terms of value, however, outbound deal activity held the greatest value among total announced deals, comprising $3.6 billion, or 62 percent of total announced deal value in Q2 2011. Comparatively, in the second quarter of 2010, domestic transactions by volume also outnumbered inbound and outbound deal activity, comprising 45 percent of total announced deals; and outbound deals held the greatest value among total announced deals, comprising $9.1 billion or 76 percent of total announced deal value. "The region's cash rich companies continue to make global acquisitions and this is reflected in outbound acquisition activity. This trend is firmly set and is expected to continue as high quality global assets become more attractive in long-term value," Phil noted. In the domestic M&A space, the sectors with the greatest deal activity in second quarter 2011 were diversified industrial products (8 deals) and consumer products (7 deals). The sector with the greatest deal value in the domestic space in second quarter 2011 was insurance, worth $400 million. In the outbound space, the sector that experienced the greatest deal activity in second quarter 2011 in terms of volume was real estate (including hospitality & leisure) with 4 deals. Sectors with the greatest deal value in the outbound space in second quarter included banking & capital markets ($1.9 billion), power and utilities ($736 million) and real estate ($379 million).
