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 latest EY MENA M&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.

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-

The ADX fell 0.6% yesterday on turnover of AED 1.2 bn. The index is down 2.5% YTD.

In the green: Abu Dhabi National Takaful (+14.9%), Emirates Ins. (+13.6%) and National Bank of Umm Al Qaiwain (+6.8%).

In the red: International Holding Company (-7.9%), Aldar Properties (-6.6%) and Q Holding (-6.5%).

Over on the DFM, the index closed down 0.4% on turnover of AED 624 mn. Meanwhile Nasdaq Dubai also fell 1.5%.

CORPORATE ACTIONS-

#1- Americana Restaurants International secured ADX approval to repurchase 25 mn of its own shares from the open market, an ADX filing (pdf) reads. These shares will be allocated to eligible employees under the company’s long-term incentive program.

#2- Dubai developer Drake & Scull agreed to settle outstanding payments with Italian developer Itinera related to the Reem Mall project, according to a board decision (pdf).

Background: In 2018, the Emirati developer was awarded a AED 600 mn contract for the mechanical, electrical and plumbing work for the USD 1.2 bn Reem Mall in collaboration with its main developer, a JV between Itinera and UAE-based contractor Ghantoot. Drake & Scull formed a JV with the Itinera-Ghantoot firm, in which it held a 90% stake. The firm has since been struggling with losses, and underwent a restructuring plan — which wrote off 90% of its debt — back in November 2023.