Merger and acquisition (M&A) activity in the Middle East appears to be picking up, according to the latest data by mergermarket, the global M&A intelligence service. For the first quarter 2012, the value of deals transacted was more than three times higher than the previous quarter - $4 billion compared with $1.68 billion in Q4 2011. Over the same period, the number of deals closed jumped from 21 to 35. In 2011, the value of total deals stood at $12.5bn compared with $14 billion in 2010. "This is positive news for the M&A industry in the Middle East for it shows that a degree of investor confidence is returning to the Middle East market despite the Arab Spring and crisis in the eurozone," said mergermarket's head of GCC and Middle East, Lucia Dore. But the data also shows that although the number of deals in the region transacted is creeping back to pre-financial crisis levels, actual deal size is getting smaller. While it took 35 deals to reach the $4 billion figure this past quarter, back in Q3 2009 only 30 deals were required to achieve $11.1 billion. For the 13 months to the end of the first quarter this year, the most buoyant sector proved to be industrials and chemicals with $4.2 billion worth of deals, constituting one-quarter of the total deal value of $16.5 billion. However, this sector saw a turn of fortunes in the first quarter of the year with no deal activity at all. Other top-ranking sectors in terms of deal activity for 2011 were consumer ($2.9 billion) followed by technology ($2.3 billion), financial services ($1.8 billion), and the pharma, medical and biotech sectors ($1.5 billion). However, over the 13-month period there was little deal activity in the telecom sector ($185 million), despite the considerable expectation that there would be. The low level of deal activity reflects the failed bid by Etisalat, the UAE telecom operator, for a 46 percent stake in Kuwait's telco Zain early last year. This was followed a few months later by a consortium comprising Batelco, the Bahraini telecom operator and Saudi investment firm, Kingdom Holding, abandoning their bid to acquire a 25 percent stake in Zain Saudi. For the first quarter of the year, the consumer sector was one of the most buoyant ($1.2 billion), next to financial services ($1.3 billion). March saw a major transaction with the the takeover of Nasdaq Dubai listed jewelry chain, Damas International, by Qatari conglomerate, Mannai Corporation for $445 million. In February, a $134 million transaction also closed, with Turkish Coca Cola Icecek, buying an 85 percent stake in Iraq's soft drinks firm, Al Waha for Softdrinks, Mineral Water and Juices.
