Middle East M&A activity doubles to $15.7bn in first nine months of 2012, reveals Thomson Reuters report

Russell Haworth, Managing Director, Middle East & North Africa at Thomson Reuters, commented, "In respect to M&A activity during the first nine months of 2012, Telecoms was the most targeted industry in the Middle East with $6.4bn. The United Arab Emirates was the most active Middle Eastern country with $4.0bn of the total M&A activity so far during 2012."

"Investment banking has seen strong activity across Middle Eastern markets during the third quarter of 2012. This is clearly evident by the fees generated from the equity capital markets underwriting which reached $81.5m. This marks the strongest first nine months for fees in the region since 2008," he added.

Mr. Haworth said, "Islamic debt issuance reached $23.4bn from 63 issues during the first nine months of 2012, an increase of 50% from the same period last year, and the strongest first nine months since 2008. The top Islamic issuer nation during the first half of 2012 is Malaysia with 57% of the activity, while the strongest industry is the financial sector."

In respect to investment banking, Middle Eastern fees reached $402.2m during the first nine months of 2012, a 23% increase from the first nine months of 2011 when fees reached $327.5m. Middle Eastern debt capital markets fees during the first nine months of 2012 reached $81.9m, nearly double the $41.9m seen during the same period in 2011. M&A fees recorded $103.3m during the first nine months of 2012, down 14% from the same period last year ($120.3m).

Fees from syndicated lending reached $135.5m, up 38% over the first nine months of 2011 and accounting for 34% of the overall fee pool. Fees from equity capital markets underwriting recorded $81.5m, marking the strongest first nine months for fees in the region since 2008.

RBS topped the Middle Eastern completed M&A fee rankings for the first nine months of 2012, earning 12.2% of the fee pool. Qatar National Bank topped the Middle Eastern ECM fee rankings with $16.0m, followed closely by Saudi Fransi Capital with $15.9m. Deutsche Bank and Saudi British Bank topped the debt capital markets and syndicated lending fee league tables, respectively.

In respect to M&A activity, Goldman Sachs topped the Middle Eastern Involvement M&A Ranking during the first nine months of 2012 with $5.9bn, while Credit Suisse took second place with $4.8bn. HSBC topped the Middle Eastern target M&A Ranking, controlling 26% of the market. The largest Middle Eastern deal so far this year was Qtel's $2.2bn offer for the Kuwait-based telecommunications operator, Wataniya, in August.

Equity capital markets issuance reached $2.5bn during the third quarter of 2012, down 39% from the previous quarter. ECM activity during the first 9 months of 2012 totaled $7.5bn, down 16% from the same period last year. Follow-ons accounted for 76% of ECM activity during the first nine months of 2012, while IPOs accounted for 22%.

The largest Middle Eastern ECM transaction during the third quarter was a $1.6bn a follow-on from Mobile Telecommunications Co Saudi Arabia. Bolstered by this deal, and Qtel's $1.9bn follow-on in May, Telecoms was the most active sector in the Middle East during the first nine months of 2012 with 42%. Qatar National Bank topped the Middle Eastern Equity Capital Markets ranking during the first nine months of 2012.

Middle Eastern debt issuance reached $6.3bn during the third quarter of 2012, a 6% decline from the second quarter total of $6.7bn. It took activity during the first nine months of 2012 to $23.9bn, up 52% on the same period in 2011. Investment grade corporate debt accounted for 70% of all Middle Eastern DCM activity during the third quarter. HSBC took the top spot in the Middle Eastern bond ranking for the first nine months of 2012 with a 14% share of the market.