MENA M&A transactions totalled $109 bn in 2021

MENA equity capital markets (ECM) raised $14.5 billion from 42 offerings in 2021, a 193 per cent increase in proceeds from last year and a thirteen year high in the number of ECM deals. Debt Capital Markets (DCM) in the MENA region totals $107.5 billion from 152 issuances in 2021, down 12 per cent in proceeds compared to the same period last year.

Commenting on the report, Saiem Jalil, Deals Intelligence Analyst, Refinitiv, said: “Despite the uncertainties around the pandemic and outlook for 2021, M&A in the MENA region recovered strongly with $109billion in proceeds, up 57 per cent from last year and the third $100 billion year on record. 2021 was the first year M&A with any MENA involvement surpassed 1,000 deals demonstrating growing optimism in the region. Strong recovery in business performance throughout 2021 demonstrated a return for capital markets driving momentum, contributed by ECM proceeds up 193 per cent to $14.5 billion and investment-grade corporate debt at record levels with $66 billion in proceeds.”

INVESTMENT BANKING FEES

Investment banking fees in the Middle East & North Africa (MENA) totals $1.4 billion in the full year of 2021, up 3 per cent from the same period last year and the second-highest total on record. Completed mergers and acquisition fees declined 26 per cent to $317.2 million, making up 22 per cent of the total investment banking fee pool. Equity capital markets recorded their strongest year in 13 years, producing $334.4 million in fees, a 251 per cent increase from last year. Equity underwriting fees made up 23 per cent of the total fee pool, the highest proportion since 2008.

Bond underwriting fees accounted for $271.6 million, down 7 per cent however still account for one-fifth of the total MENA fee pool. Fees earned from syndicated lending total $525 million, down 12 per cent from 2020 and accounted for 36 per cent of the total fee pool. The financial sector continued its dominance in 2021 for the highest fee-earning sector with $495.5 million in related fees, or 34 per cent market share. JP Morgan rose to the top spot from last year in the region, earning $143.7 million in fees or a 9.9 per cent share of the market. HSBC and Morgan Stanley took second and third place with 8 per cent and 6.2 per cent market share, respectively.

MERGERS & ACQUISITIONS

Announced M&A with any MENA involvement totals $109.1 billion throughout 2021, a 57 per cent increase from last year and the third year where any MENA involvement M&A volumes surpassed $100 billion. A total of 1,141 deals was recorded in 2021, a 40 per cent increase from 2020 and the highest annual total since records began in 1980. M&A involving a MENA target reached $72.9 billion, making it the second-highest total since records began in 1980 and the strongest year of the number of deals with 863 deals in 2021.

Inbound M&A reached record levels with $45.4 billion of M&A activity in 2021, up 88 per cent and the highest level since records began in 1980. Outbound M&A totalled $30.2 billion in 2021, up 198 per cent from 2020 and a six-year high. The largest M&A deal in the MENA region of 2021 was Aramco Gas Pipelines Co in a deal worth $15.5 billion lease and leaseback agreement for its gas pipeline network. Energy and Power was the most active sector with $38.8 billion in deal activity, representing a 189 per cent increase from last year.

Saudi Arabia was the most targeted nation with $27.3 billion in M&A activity, equivalent to half of target M&A recorded in the region. JP Morgan topped the any MENA Involvement M&A league table in 2021 with $43.3 billion in related activity or a 40 per cent share of the market. Goldman Sachs came second with a 37 per cent share of the market.

EQUITY CAPITAL MARKETS

MENA equity capital markets (ECM) raised $14.5 billion from 42 offerings in 2021, a 193 per cent increase in proceeds from last year and a thirteen year high in the number of ECM deals. Initial public offerings raised $8.2 billion in 2021, accounting for 56 per cent of total proceeds, a 341 per cent increase from 2020. Follow-on issuances totalled $5.1 billion in 2021, a 65 per cent increase from last year and a thirteen-year high.

The largest equity offering of the year was Saudi Telecom’s Follow-on issuance of $3.2 billion after the Public Investment Fund (PIF) sold 6 per cent of its stake. Saudi Arabia was the most active country with $8.9 billion in ECM proceeds followed by United Arab Emirates with $4.3 billion. Citi takes the top spot in the MENA ECM league table advising on $2.5 billion of deals or a 24 per cent market share.

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