M&A activity in MEA posts strong performance in Q1 with 110 deals

By Amirtha P S, Desk Reporter
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The Mergers and Acquisitions (M&A) activities in the Middle East and Africa (MEA) region recorded strong performance during the first quarter of this year, a recent report shows. 

The latest data from Mergermarket on M&A reveals that following a strong end to 2020, M&A in the MEA region had an active first three months of 2021, recording a total $32.7 billion across 110 deals, indicating a 52 percent jump in comparison to the equivalent period in 2020 with 85 deals.

In the opening quarter, foreign investment into the region became a key reason for the jump, with inbound activity reaching $24.7 billion across 52 transactions in the first quarter of 2021. This marks the highest quarterly inbound value since the fourth quarter of 2007 which touched $26.2 billion and accounts for 75.6 percent of the total M&A value in the region so far this year.

According to the recent data, the technology sector has remained to be most active in the region in terms of both value and volume. The energy, mining, and utility industry saw an increase by reaching $4.6 billion across 18 deals so far this year.

Vijay Valecha
Vijay Valecha
CIO – Century Financial

“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.”

Globally the volume of M&A activities are on the pace to rise 43 percent year on year and the first quarter of 2021 has witnessed transactions worth $0.93 trillion.

The five new trends that could characterize a strong market in 2021 could be, supportive markets with low capital costs, rebound in sectors impacted by COVID-19, companies increasing scale and acquiring technology, recovery in cross-border M&A and abundant capital from private equity and SPACs.

“The SPAC concept will gain further momentum and traction in the years 2021 and 2022 that will provide a further boost to M&A activities in the region and globally. Abundant capital is available with private equity investors to invest in companies through SPAC structures,” said Dhaval Jasani, founder and chief executive officer at ZTI.

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