MENA Mergers and Acquisition transactions totalled US$ 31.9 billion in H1 2023

UAE – Refinitiv, an LSEG (London Stock Exchange Group) business, today released the H1 2023 investment banking analysis for the MENA markets. According to the report, an estimated US$475 million worth of investment banking fees were generated in the Middle East & North Africa during the first six months of 2023, half the value recorded during the same period in 2022 and the lowest first-half total since 2015. 

INVESTMENT BANKING FEES

An estimated US$475 million worth of investment banking fees were generated in the Middle East & North Africa during the first six months of 2023, half the value recorded during the same period in 2022 and the lowest first-half total since 2015.  Advisory fees earned from completed M&A transactions in the region totalled US$95.4 million, a 70% decrease from year ago levels and the lowest first-half total in five years.  Equity capital markets underwriting fees also recorded a decline, falling 46% year-on-year to US$128.1 million, a two-year low. Syndicated lending fees declined 68% to a twelve-year low of US$113.7 million, while debt capital markets underwriting fees increased 170% to a two-year high of US$137.7 million. MENA fees account for 0.9% of investment banking fees earned globally during the first half of 2023, down from 1.6% during first-half 2022.  Thirty-nine percent of all MENA fees were generated in the United Arab Emirates, followed by Saudi Arabia (37%). JP Morgan earned the most investment banking fees in the region during the first half of 2023, a total of US$36.2 million or a 7.6% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any MENA involvement reached US$31.9 billion during the first six months of 2023, down 34% compared to a year ago and the lowest first half total since 2017.  While down 23% from last year’s all-time record first half tally, the number of deals announced in the region during the first six months of 2023 reached the third highest first-half level since our records began in 1980. Deals involving a MENA target totalled US$15.1 million during the first six months of 20203, down 43% from last year and a six-year low.  Inbound deals involving a non-MENA acquiror declined 13% to US$7.6 billion, while domestic deals decreased 58% in value to US$7.6 billion.  MENA outbound M&A totalled US$16.0 billion, a first-half total only exceeded once in the last fifteen years. The Financials sector was most active, with deals targeting industrial companies accounting for 57% of MENA target M&A during the first half of 2023, followed by the Media & Entertainment sector with 11%. The United Arab Emirates was the most targeted nation, followed by Saudi Arabia and Oman. JP Morgan topped the any MENA involvement announced M&A financial advisor league table during the first half of 2023.

EQUITY CAPITAL MARKETS

MENA equity and equity-related issuance totalled US$5.7 billion during the first six months of 2023, the third highest first half total since our records began.  Proceeds raised by companies in the region declined 59% compared to first-half 2022, while the number of issues dropped by 23%. Initial public offerings accounted for 94% of activity, while follow-on issuance accounted for 6%. A total of 23 initial public offerings were recorded during the first half of 2023, one more than last year at this time and the highest first-half tally since 2008.  They raised a combined US$5.3 billion.  Abu Dhabi National Oil Company (ADNOC) raised US$2.5 billion in its stock market debut in March.  The state-owned oil company IPO is the largest-ever listing on the Abu Dhabi Securities Exchange. The energy & power sector was most active, with issuers raising US$2.8 billion accounting for 49% of total equity capital raisings in the region.  The industrials and high technology sectors followed, accounting for 14% and 12%, respectively. EFG Hermes took first place in the MENA ECM underwriting league table during the first half of 2023 with a 9.5% market share, followed by Dubai Islamic Bank PJSC.

DEBT CAPITAL MARKETS

MENA debt issuance totalled US$45.9 billion during the first six months of 2023, more than double the value recorded during the same period in 2022 and a two-year high.  The number of issues declined 16% over the same period.  Saudi Arabia was the most active issuer nation during the first half of 2023 accounting for 60% of total bond proceeds, followed by the United Arab Emirates (22%), and Bahrain (6%). Government & Agency issuers accounted for 52% of proceeds raised during the first half of 2023, while Financial issuers accounted for 40%. Islamic bonds raised US$18.4 billion during the first half of 2023, an increase of 189% from year ago levels and the highest first half total in six years.  Sukuk account for 40% of total bond proceeds raised in the region, compared to 35% last year. Citi took the top spot in the MENA bond bookrunner ranking during the first half of 2023 with US$5.9 billion of related proceeds, or a 13% market share. Citi also ranks first in the H1 2023 MENA Islamic bonds league table.

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