Middle East and Africa records 52% jump in M&A activity in Q1

The Middle East and Africa (MEA) region has recorded a strong performance in Mergers and Acquisitions (M&A) activity during the first quarter. The latest report from M&A data from Mergermarket shows that following a strong end to 2020, M&A targeting MEA had an active first three months of 2021, reaching a total $32.7 billion across 110 deals, indicating a 52 per cent jump in comparison to the equivalent period in 2020 ($21.5 billion, 85 deals) with 25 more deals conducted this year.

Foreign investment into the region has been key to the increase in the opening quarter, with inbound activity reaching $24.7 billion across 52 transactions in first quarter of 2021. This represents the highest quarterly inbound value since fourth quarter of 2007 ($26.2 billion) and accounts for 75.6 per cent of the total MEA M&A value so far this year.

The latest data suggests that tech has remained the most active sector in the region by both value and volume, jumping to $14.7 billion (31 deals). Three of the region’s ten largest deals targeted the tech sector. The energy, mining, and utility sector has also seen an increase in both value and volume, reaching $4.6 billion across 18 deals so far this year.

In line with global activity, there has been a surge in private equity dealmaking in the region in the opening quarter of 2021 with an increase in both buyouts and exits. Sponsors deployed a total of $18.3 billion across 26 buyouts in first quarter, which represents the region’s highest quarterly buyout value and volume on record.

“The Mena region witnessed a new record of investment in the first quarter which was driven mainly by the tech sector growth as the population moved to adopt digital solutions. The improving market conditions, increasing scope of growth and Special Purpose Acquisition Companies (SPACs) looking to invest capital led to to a stellar MEA M&A value so far this year. The M&A recovery that began in the second half of 2020 and has accelerated in 2021, as investors have access to capital and pursing to expand the scope,” said Vijay Valecha, CIO, Century Financial.

“Moreover, in 2021 countries have realised smart cities’ potential, and have started envisioning an eco-friendly world. The Mena private capital investments this year have rebounded and the capital assets under management are expected to see a rise of over 11 per cent CAGR by 2025. The estimated forecast reflects the restoration of investor confidence in the region,” concluded Valecha. — sandhya@khaleejtimes.com