Saudi and the UAE lead EY’s regional M&A league table

Saudi Arabia and the UAE were the top inbound M&A destinations in the GCC in 1H 2024, accounting for 152 inbound transactions at a disclosed value of USD 9.8 bn, according to the the latest EY MENAM&A Insights report. The GCC giants were also leading bidders, as sovereign wealth funds including the Public Investment Fund and the UAE’s Abu Dhabi Investment Authority (ADIA) and Mubadala doubled down on economic diversification plans.

Overall: The M&A count inched up 1% y-o-y at 321 transactions in the first half, while aggregate transaction value rose 12% to USD 49.2 bn, the report showed.

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Saudi was home to the highest number of inbound M&As and was also the most-frequent bidder during the period.

The UAE was responsible for the largest transaction, with Mubadala’s USD 12.4 bnacquisition of Truist Ins. topping the list. Mubadala and ADIA were together responsible for the second-largest M&A transaction as the pair put down USD 8.3 bn for the Chinese mall unit of Dalian Wanda in April.

Saudi and Emirati countries have appetite — for each other: The first half of 2024 saw 94 transactions involving UAE companies on one side and the Kingdom on the other, accounting for 61% of intra-regional dealflow. Intra-regional transactions were worth c. USD 6.4 bn during the period, up 13% compared to the first half of 2023.

Inter-regional M&A activity accounted for 166 (52%) of 321 total transactions. Inter-regional activity also accounted for the lion’s share (87%) of transaction value at USD 42.8 bn, a 15% y-o-y increase.

GCC-based investors preferred the US as a destination for outbound M&A, closing 19 transactions Stateside worth some USD 16.6 bn. Europe accounted for 80% of inbound activity by volume, but companies in the United States were responsible for 98% by total value in USD terms.

MARKETS THIS MORNING-

The Nikkei tumbled more than 3% at the opening bell and is holding steady there after the Bank of Japan yesterday raised its interest rate target to 0.25%, the highest level since 2007, on the eve of the global financial crisis.

Markets are otherwise mixed. The ASX 200 and the Kospi are in the green this morning, as is the Shanghai Composite, while the Hang Seng is down 0.3%.

European equities futures are mixed this morning, but punts on major Wall Street benchmarks were all up slightly in overnight trading as investors welcomed the Fed’s signal yesterday that it is essentially on track to start cutting interest rates in September.

THE CLOSING BELL: TADAWUL-

The TASI rose 0.4% yesterday on turnover of SAR 6.4 bn. The index is up 1.2% YTD.

In the green: Arabian Pipes (+8.1%), Saudia Dairy and Foodstuffs (+4.8%) and Makkah Construction and Development (+4.3%).

In the red: Al Baha Investment and Development (-7.7%), Al Taiseer Group (-6.7%) and Arabian Cement (-4.8%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.1% yesterday on turnover of SAR 46.8 mn. The index is up 8.8% YTD.

In the green: Mohammed Hadi Al Rasheed and Partners (+19.0%), Alqemam for Computer Systems (+7.5%) and Neft Alsharq (+6.0%).

In the red: Mayar Holding (-13.4%), Ghida Alsultan for Fast Food (-9.9%) and Mulkia Investment (-9.8%)

CORPORATE ACTIONS-

Alkhabeer Capital will distribute SAR 14.8 mn in dividends for 2Q 2024 at SAR 0.1 apiece, it said in a disclosure to Tadawul. Distributions will be made within 40 business days after the entitlement date, set for Tuesday, 13 August.

Middle East Pharma Industries will distribute SAR 15 mn in dividends for 1H 2024, at SAR 0.75 per share, it said in a disclosure to Tadawul. The payments are scheduled for Sunday, 15 September.

Al Jouf Cement scrapped its previous recommendation to hike its capital through priority rights shares, it said in a disclosure to Tadawul. This decision follows improvements in financial flows due to loan rescheduling with Alinma Bank and SAB, boosted sales, and cost-cutting measures. The initial plan aimed to settle debts and distribute profits to shareholders.

Tadawul-listed Arriyadh Development will distribute SAR 44.4 mn in dividends at SAR 0.25 per share for 1H 2024, it said in a disclosure to Tadawul. Distribution is set for Thursday, 19 September.

Al Rajhi Capital will distribute SAR 35.8 mn in dividends to all unitholders of its Al Rajhi REIT Fund for 2Q 2024, it said in a disclosure to Tadawul. Unitholders will receive the dividends on Thursday, 29 August.

Savola Group has landed regulatory approval for a SAR 6 bn capital hike, according to a statement from the Capital Market Authority.