Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals has confirmed that Middle Eastern Mergers and Acquisitions (M&A) touched $50.3 billion in 2014, an increase of 23% compared to 2013 of announced transactions in the region, the Middle Eastern Mergers and Acquisitions (M&A) touched $50.3 billion in 2014, an highest annual total since 2010.
The annual investment banking analysis for the Middle East region released yesterday pointed out that outbound M&A drove 2014 activity, a rise of 74% from 2013 to reach $26 billion, the highest annual total since 2009.
Qatar’s overseas acquisitions accounted for 65% of Middle Eastern outbound M&A activity, while acquisitions by UAE and Saudi Arabian companies accounted for 15% and 9% respectively, it said.
Domestic and inter-Middle Eastern M&A declined 12% year-on-year to $14 billion during 2014. Inbound M&A also declined, falling 30% to $4.2 billion, the Thomson Reuters report said
The largest deal with Middle Eastern involvement in 2014 was the $9.1 billion offer for Songbird Estates, the owner of London’s Canary Wharf financial district, by The Qatar Investment Authority and Canada’s Brookfield Property Partners. Boosted by this deal, real estate was the most active sector in 2014, accounting for 38 Thomson Reuters of Middle Eastern involvement M&A.
Citi topped the 2014 announced any Middle Eastern involvement M&A league table with $15.4 billion.
In respect to Equity Capital Markets, 13 initial public offerings (IPO) raised $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.
Saudi Arabi’s National Commercial Bank raised $6 billion from its initial public offering in November. It holds the record for the largest Middle Eastern IPO of all-time, and was 2014’s second biggest initial public offering after Alibaba. Meanwhile, HSBC took first place in the 2014 Middle Eastern ECM ranking followed by GIB Capital and Qatar National Bank.
Further, investment banking fees reached $147.25 million during the fourth quarter of 2014, 19% more than the value recorded during the previous quarter.
Nadim Najjar, managing director, Middle East and North Africa at Thomson Reuters, said: “The value of announced M&A transactions with any Middle Eastern involvement reached $22.7 billion in the fourth quarter of 2014, more than double the value registered during the previous quarter, and the highest quarterly total since the first quarter of 2008.”
“Middle Eastern equity and equity-related issuance totalled $11.4 billion in 2014, a 173% 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 in the third quarter.”
Despite the uptick in the investment banking fees during the last quarter, fees earned during 2014 declined 3% from $776.2 million in 2013, to $751.7 million. Equity capital markets (ECM) underwriting fees totalled $125.1 million in 2014, up 163% from the previous year ($47.5 million), and marking the best annual total for ECM fees in the Middle East since 2009. ECM fees accounted for 17% of this year’s overall Middle Eastern fee pool.
Fees from completed M&A transactions totalled US$159.2 million, down 5% 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% to $233.4 million.
HSBC earned the most investment banking fees in the Middle East during 2014, a total of $56.9 million for a 7.6% share of the total fee pool. Lazard topped the Middle Eastern completed M&A fee league table, while HSBC was first in the ECM and DCM underwriting fee rankings. Mizuho Financial took the top spot in the Middle Eastern loans fee ranking.
Debt Capital Markets were active as well. Bonds issued during 2014 decreased 6 per cent from 2013, to $37 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% year-on-year to reach $39.1 billion. HSBC took the top spot in the Middle Eastern bond ranking during 2014 with a 14% share of the market.