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August 29, 2016 | 13:45 | Dubai
Despite sluggish macro-economic situation at the beginning of 2016, overall deal activity in H1 2016 was largely consistent with H1 2015. UAE, Saudi Arabia and Egypt were the top three markets in terms of deal activity in H1 2016. Announced deal value in the MENA region decreased from US$21.9b in H1 2015 to US$19.7b in H1 2016, a decrease of 10%. Technology (US$4.4b), real estate (US$ 4.2b) and Consumer Products (US$3.7b) were the top three sectors by deal value in H1 2016.
Phil Gandier, MENA Transaction Advisory Services Leader, EY, says: “With modest recovery in the macro-economic situation, the outlook for M&A in H2 2016 remains cautiously optimistic and the deal activity on a full year basis in 2016 is expected to mirror the performance in 2015 “
In H1 2016, both from a deal activity and value perspective, significant portion of technology and real estate deals were outbound. In line with the trend noticed in H1 2015, acquisition capital allocation to outbound transactions in H1 2016 was at 52% of total deal value. Europe and U.S continued to be the top two destinations for outbound transactions. Domestic M&As had a positive performance in the first half of 2016, recording an increase in value of 67% in H1 2016 compared to H1 2015. During this period, consumer products, industrial products, real estate, banking & capital markets witnessed significant deal activity.
Anil Menon, MENA M&A and Equity Capital Markets Leader, EY, says: “Improving business sentiment and investor confidence is expected to see an uptick in domestic M&A activity during H2 2016 especially in consumption led sectors in key markets such as KSA and UAE.