The value of mergers and acquisitions (M&A) activity in the Middle East and North Africa (MENA) region increased 30 percent in the first half of this year to $21.17 billion, compared to $16.26 billion over the same period last year, Zawya said Tuesday in its report on "Shrugging off the effects of the Arab Spring". The period witnessed a total of 173 deals, an increase of 33 percent over the 130 deals closed in the same period of 2010, it added. The countries included in the report were the GCC and Levant countries, in addition to Egypt, Morocco, and Tunisia. Saudi Arabia saw the number of deals increase by 118.18 percent from 11 in 1H2010 to 24 in 1H2011 reflecting a solid economy. Deal value in the Kingdom increased by 266 percent from $467.2 million in 1H2010 to $1.71 billion in 1H2011. There were four external investors, with 20 regional and domestic players, clearly demonstrating a huge appetite within the region to invest in Saudi Arabia, the report noted. Youssef M. Saada, Head of Financial Research at Zawya, said: "Zawya's M&A tools bring forth a comprehensive coverage of regional M&A activity, allowing identification of trends and opportunities and more over creating a dialogue within the industry. Our MENA report "Shrugging off the effects of the Arab Spring" highlights the important players in the region and presents a positive outlook for regional M&A activity towards the end of year 2011". Tunisia witnessed the largest average deal value of $535 million in the first half of 2011, with four deals totaling $2.14 billion. In comparison, in 1H2010, Qatar recorded the highest average value per deal with $937 million from six deals valued at $5.6 billion. However, the UAE took the lead in terms of deal volume with 32 deals in 1H2011 compared to nine in 1H2010, resulting in a remarkable increase of 226 percent. Targeted deal values in the UAE amounted to $2.07 billion in 1H2011, compared to $633.91 million in 1H2010, resulting in an increase of 226 percent. The UAE also secured the largest M&A transaction in 1H2011 worth $5.06 billion, when Abu Dhabi-based International Petroleum Investment Company acquired an incremental 48.9 percent equity stake in Spain's Compania Espanola de Petroleos SA. This eclipsed the largest deal of 1H2010, which was between Ezdan Real Estate Company and International Housing Company in Qatar, marking a $3.33 billion deal value. One of the most prominent deals in 1H2011 was the cancellation of Emirates Telecommunications Company (Etisalat) acquisition of a 46 percent stake in Zain Kuwait for $12.09 billion, valued as the largest M&A deal in the region. The cancellation was primarily due to a lack of consensus between Zain shareholders. M&A activity also surged in non-GCC countries with Tunisia, Lebanon and Morocco being the main drivers. The total targeted value of M&A activity in the MENA region during 1H2011 reached $9.29 billion, out of which the GCC countries contributed 56 percent for a total of $5.23 billion. Comparatively, 1H2010 logged $10.53 billion, from which the Gulf nations contributed $8.35 billion, or 79 percent. Across the MENA region, the sectors targeted by investors saw little change from 1H2010 to 1H2011. The financial services, industrial manufacturing and real estate sectors continue to dominate the charts in terms of deal volume in targeted sectors in both 1H2010 and 1H2011. In terms of deal value, oil and gas topped the charts, with $6 billion in 1H2011, compared to real estate's $4.7 billion in 1H2010.
