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Middle Eastern M&As reach $22.7 billion in Q4 2014

Qatar tops the Middle Eastern outbound M&A activity with 65 per cent of overseas acquisitions

The value of announced M&A transactions with any Middle Eastern involvement  reached $22.7 billion during the fourth quarter of 2014, says a Thomson Reuters’ official.

“Middle Eastern equity and equity-related issuance totalled $11.4 billion in 2014, a 173 per cent increase in activity from 2013 ($4.2 billion), while Middle Eastern debt issuance reached $3.5 billion during the fourth quarter of 2014, half the value raised during the third quarter,” says Nadim Najjar, managing director of Middle East and North Africa, Thomson Reuters.

Najjar was commenting on Thomson Reuters’ annual investment banking analysis for the Middle East region released on Tuesday.

Qatar topped the rank of Middle Eastern outbound M&A activity with 65 per cent of overseas acquisitions, while acquisitions by UAE and Saudi Arabian companies accounted for 15 per cent and 9 per cent, respectively.

Domestic and inter-Middle Eastern M&A declined 12 per cent year-on-year to $14.0 billion during 2014. Inbound M&A also declined, falling 30 per cent to$4.2 billion.

Outbound M&A drove 2014 activity, up 74 per cent from 2013 to reach $26.0 billion, the highest annual total since 2009.

In 2014 the Middle Eastern announced M&A transactions reached $50.3 billion, an increase of 23 per cent compared to 2013, and the highest annual total since 2010.

According to estimates from Thomson Reuters / Freeman Consulting, Middle Eastern investment banking fees reached $147.25 million during the fourth quarter of 2014, 19 per cent more than the value recorded during the previous quarter.

Fees earned during 2014 declined 3 per cent from $776.2 million during 2013, to $751.7 million, despite the uptick in the investment banking fees during the last quarter, says Thomson Reuters.

Equity capital markets underwriting fees totalled $125.1 million in 2014, up 163 per cent from the previous year ($47.5 million), and marking the best annual total for ECM fees in the Middle East since 2009, it adds.

ECM fees accounted for 17 per cent of this year’s overall Middle Eastern fee pool.

Completed M&A transactions’ fees totalled $159.2 million, down 5 per cent from 2013 and accounting for 21 per cent of the fee pool.

Fees from debt capital markets underwriting declined 27 per cent year-on-year to $86.8 million, while syndicated lending fees fell 21 per cent to $233.4 million.

With regards to Equity Capital Markets, thirteen initial public offerings raised US$7.9 billion and accounted for 69 per cent of activity in the region.

Follow-on and convertible offerings accounted for 22 per cent and 9 per cent, respectively.

Debt Capital Markets were active as well, says Thomson Reuters. Bonds issued during 2014 decreased 6 per cent from 2013, to $37.0 billion.

Investment grade corporate debt totalled $33.4 billion and accounted for 90 per cent of the annual total.  The United Arab Emirates was the most active nation accounting for 48 per cent of activity, followed by Saudi Arabia with 30 per cent.

International Islamic debt issuance increased 18 per cent year-on-year to reach $39.1 billion.