M&A activity in the Arabian Gulf slows down as caution prevails

Bloomberg/Charles Crowell

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Several mega deals were completed in Q1 2019 including Network International initial public offering (IPO), acquisition of Careem by Uber as well as Saudi Aramco bond listing and investment into ADNOC pipeline and refinery assets by international investors.

Tuesday 25, June 2019 BY MUZORIWA KUDAKWASHE

PwC said that merger and acquisition (M&A) activity in the Arabian Gulf continues to slow down in the current year, with 44 deals having reported in Q1 2019 compared to 56 the same period last year.

Romil Radia, Deals Client & Markets Leader at PwC Middle East, said, “PwC’s TransAct Middle East report reveals a varied landscape across markets and sectors, with several prominent themes emerging despite macro-economic challenges and a slowdown in the 2018 deal market.”

PwC reported that only two IPOs were reported in Q1 2019 compared to four in Q1 2018.

Private equity activity also declined from 26 per cent to 21 per cent of all deals in 2018, however corporate buyers increased their share of deals from 54 per cent in 2017 to 60 per cent the same period in 2018 with energy, financial services and healthcare among the most active sectors.

“We expect to see a positive outlook in M&A activity for some sectors over the next 12-18 months,” added Radia.

PwC expects an increase in tech driven activity, with a number of deals completed in the sector in the 2018 and the trend is expected to continue this year as businesses seek to acquire stakes in digital driven companies to expand their digital footprint in the region as well as protect their existing services and market share from start-ups or new entrants. 

“We are seeing consolidation in the financial services sector and I will not be surprised to see consolidation gathering momentum across certain other sectors,” added Ovais Chhotani, Transaction Services Partner at PwC Middle East.

TAGS : PwC, mergers and acquisition, IPO, Network International Holdings, Saudi Aramco, Careem Network , Uber Technologies

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