Qatar was second in the Middle East region in terms of the volume of outbound mergers and acquisitions deals in the second quarter of this year, a new report has shown.
According to global law firm Baker & McKenzie, Qatar, with eight deals, followed the category leader – the UAE with 17.
The Middle East region bucked the global trend and saw an increase in both inbound and outbound cross-regional activity in the first half of 2016, points out Baker & McKenzie’s quarterly Cross-Border M&A Index.
The volume of outbound M&A from the Middle East in H1 2016 was slightly up on H1, 2015 (with 35 deals compared to 33 deals), Baker & McKenzie report showed.
Notably, the UAE drove over half of the outbound deals from the Middle East, leading on 17 of the 35 deals seen in the first half of the year, followed by Qatar with eight deals and Saudi Arabia with four.
The drop in mega deals in 2016 resulted in lower deal value overall in the first half of the year, with outbound M&A dropping from $9.95bn for H1 2015 to $5.24bn for H1 2016.
However, Q2, 2016 deal values eclipsed the previous quarter — jumping from $985mn in Q1, 2016 to $4.26bn in Q2, 2016.
Saudi Arabia’s Public Investment Fund’s $3.5bn acquisition of a 5.6% stake in Uber Technologies was a major contributor.
The top sector by value was technology with two deals valued at $3.61bn, while the consumer sector led by volume with four deals valued at $193mn.
In terms of inbound M&As in the Middle East, the UAE has the “most interest” from international investors in H1 and was the target country of some 12 of the 16 deals into the Middle East.
The US remained the top bidder country for the first half of the year, with five deals valued at $60mn, while China led by value with three deals valued at $1.37bn.
The volume and value of deals targeting the Middle East increased from six deals worth $349mn in Q1, 2016 to 10 deals worth $1.4bn this quarter.
The energy and utilities sector was the “busiest” in Q2, 2016 by both deal volume and value, with three deals valued at $1.37bn, the top two driven by China.
Global cross-border M&A volume and values were subdued in Q2, 2016, as investors held their breath, Baker & McKenzie said.
Hesitancy persisted as global markets remained volatile, and consequently, the index, which tracks quarterly deal activity using a baseline score of 100, dropped to 176, down 33% from Q2, 2015’s total of 263, the lowest index result since Q3, 2013, it said.