Aramco’s acquisition of SABIC drives MENA M&A transactions to $112bn in H1-2019

MENA equity and equity-related issuance reached $1.1bn while debt issuance totalled $53.1bn in first half of 2019

In March this year, Saudi Aramco signed a share purchase agreement to acquire a 70% majority stake in SABIC from the Public Investment Fund of Saudi Arabia, in a private transaction for $69.1bn.
In March this year, Saudi Aramco signed a share purchase agreement to acquire a 70% majority stake in SABIC from the Public Investment Fund of Saudi Arabia, in a private transaction for $69.1bn.

Refinitiv released the Q2-2019 investment banking analysis for the Middle East. According to the report, Middle Eastern and North African investment banking fees totalled an estimated $504.8mn so far during 2019, 12.7% less than the value of fees recorded during the first half of 2018. Debt capital markets underwriting fees totalled $147.6mn, up 1.7% year-on-year the second highest fee volume for the region since Refinitiv records began in 2000.

Equity capital markets fees decreased 64.8% to $24mn, a 10-year low. Fees generated from completed mergers and acquisitions (M&A) transactions totalled $207.4mn, a 232% increase from last year to the second highest level on record. Syndicated loan fees reached $125.8mn, down 58.4% from YTD 2018. Debt capital markets fees accounted for 29.2% of the overall Middle Eastern and North African investment banking fee pool, the second highest market share since YTD 2001.

Syndicated lending fees accounted for 24.9% while the share of completed M&A advisory fees raised to the highest YTD level on record, accounting for 41.1% of the market. Equity capital markets underwriting fees accounted for 4.8%, a 10-year low. HSBC earned the most investment banking fees in the Middle East and North Africa so far during 2019, a total of $65.8mn for a 13% share of the total fee pool.

As to M&A, driven by state-owned Aramco’s $69.1bn acquisition of SABIC, the value of announced M&A transactions with any Middle Eastern and North African involvement at an all-time high reaching $112bn in the first half of 2019, 231% more than the value recorded during YTD 2018. Additionally, both Middle Eastern and North African target and inter-MENA/domestic transactions currently stand at all-time highs rising to $101.2bn and $86.1bn, up 375% and 699% from YTD 2018, respectively.

While MENA inbound M&A also stands at a YTD all-time high of $15.1bn, outbound M&A decreased from $6.5bn in YTD 2018 to $4.6bn so far during 2019, the lowest volume since YTD 2004. Energy and power deals currently account for 80% of Middle Eastern and North African involvement M&A by value, followed by the financial sector with a 13.7% market share but counting with 44 transactions, 18 more than the 26 recorded in the energy and power industry.

As to equity capital markets (ECM), Middle Eastern and North African equity and equity-related issuance totalled $1.1bn so far during 2019, a 73% decrease year-on-year to the lowest level since YTD 2004. With $923.2mn, IPOs represent 88% of the region's ECM issuance, up from 16% during YTD last year. Arabian Centres Co IPO raised $658.6mn and stands out as the biggest deal so far this year.

Despite showing a 12% decrease compared to YTD 2018, debt issuance in the Middle Eastern and North African region currently stands at the third highest level since the Refinitiv records began, reaching $53.1bn so far this year. Saudi Arabia was the most active nation in the region accounting for 40.5% of activity by value, while governments and agencies account for 48.3% of issuance so far this year.

For the latest refining and petrochemical industry related videos, subscribe to our YouTube page.

For all the latest refining and petrochemical news from the Middle East countries, follow us on Twitter and LinkedIn, like us on Facebook.

You may also like

DNV GL Energy Transition Outlook 2020: Covid-19 permanently alters global energy outlook but buys little time to reach Paris climate goals
The behavioural and economic ramifications of Covid-19 will permanently reduce global energy demand, according to DNV GL’s newly published Energy Transition Outlook
Building strong teams: Interview with Tareq Kawash, SVP for EMEA, McDermott
“If you look at a career of 30 years, it is a pretty long time, but what I have done throughout my career is build strong teams. I am proud to say that I have a formidable leadership team in the EMEA region, many of whom I have worked with for years,” says Tareq Kawash, senior vice president for Europe, Middle East and Africa, McDermott
Emerson unveils workplace dstancing, contact tracing technology to help manufacturers protect workers
Location Awareness technology helps manage workplace density, improve worker safety and ensure business continuity during global pandemic
AVEVA prioritises cloud strategy in order to respond to the demands of the new normal
Company expands core capabilities with new cloud-based solutions designed to enable increased collaboration in a transforming world

MOST POPULAR