MENA Mergers and Acquisition transactions totalled US$ 59.5 billion in first nine months of 2023

DUBAI, UAE – LSEG (London Stock Exchange Group) today released the third quarter 2023 investment banking analysis for Middle East and North Africa. 

INVESTMENT BANKING FEES

An estimated US$803.2 million worth of investment banking fees were generated in the Middle East & North Africa during the first nine months of 2023, 31% less than the value recorded during the same period in 2022 and the lowest first nine-month total since 2018.  Advisory fees earned from completed M&A transactions in the region totalled US$181.2 million, a 52% decrease from year ago levels and the lowest first nine-month total in five years.  Equity capital markets underwriting fees totalled US$165.5 million, down 39% from last year but reaching the second highest level in the last 15 years.

Syndicated lending fees declined 43% to an eight-year low of US$253.6 million, while debt capital markets underwriting fees almost tripled from last year to US$203.0 million. Forty-seven percent of all MENA fees were generated in the United Arab Emirates, followed by Saudi Arabia (34%). JP Morgan earned the most investment banking fees in the region during the first nine months of 2023, a total of US$66.1 million or an 8% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any MENA involvement reached US$59.5 billion during the first nine months of 2023, down 16% compared to a year ago and the lowest first nine-month total since 2020.  Although down 20% from last year’s all-time record first nine-month tally, the number of deals announced in the region during the first nine months of 2023 reached the third highest level since our records began in 1980. Deals involving a MENA target totalled US$18.8 billion during the first nine months of 2023, down 54% from last year and a six-year low.  Inbound deals involving a non-MENA acquiror declined 43% to US$5.8 billion, while domestic deals decreased 57% in value to US$12.9 billion.  

MENA outbound M&A totalled US$37.9 billion, up 44% from last year and the highest first nine-month total in sixteen years. The Financials sector was most active, accounting for 35% of MENA target M&A during the first nine months of 2023, followed by the Materials sector with 20%.  Saudi Arabia was the most targeted nation, followed by the United Arab Emirates and Oman. JP Morgan topped the any MENA involvement announced M&A financial advisor league table during the first nine months of 2023.

EQUITY CAPITAL MARKETS

MENA equity and equity-related issuance totalled US$7.5 billion during the first nine months of 2023, the second highest first nine-month total in the last fifteen years.  Proceeds raised by companies in the region declined 50% compared to first-half 2022, while the number of issues dropped by 14%. Initial public offerings accounted for 91% of activity, while follow-on issuance accounted for 9%. 

A total of 30 initial public offerings were recorded during the first nine months of 2023, one more than last year at this time and the highest first nine-month tally since 2008.  They raised a combined US$6.8 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 in the region so far this year and the largest-ever listing on the Abu Dhabi Securities Exchange.

The energy & power sector was most active, with issuers raising US$4.0 billion accounting for 53% of total equity capital raisings in the region.  The industrials and high technology sectors followed, accounting for 10% and 9%, respectively. EFG Hermes took first place in the MENA ECM underwriting league table during the first nine months of 2023 with an 11% market share.

DEBT CAPITAL MARKETS

MENA debt issuance totalled US$61.1 billion during the first nine months of 2023, almost triple the value recorded during the same period in 2022 but lower than the first nine-month total recorded during each of the previous five years.  The number of issues declined 3% over the same period.  Saudi Arabia was the most active issuer nation during the first nine months of 2023 accounting for 50% of total bond proceeds, followed by the United Arab Emirates (32%), and Bahrain (7%).

Financial issuers accounted for 44% of proceeds raised during the first nine months of 2023, while Government & Agencies accounted for 43%. Islamic bonds in the region raised US$26.1 billion during the first nine months of 2023, a first nine-month record.  Sukuk account for 43% of total bond proceeds raised in the region, compared to 38% last year. Citi took the top spot in the MENA bond bookrunner ranking during the first nine months of 2023 with US$7.8 billion of related proceeds, or a 13% market share. Standard Chartered takes first in the MENA Islamic bonds league table.