MENA M&A deals reached US$80.0 billion in 2023

MENA M&A deals reached US$80.0 billion in 2023

Key highlights include:

– An estimated US$1.2 billion in investment banking fees generated in the Middle East & North Africa during 2023.

– The value of announced M&A transactions involving MENA reached US$80.0 billion in 2023.

– MENA equity and equity-related issuance totaled US$13.3 billion during 2023.

– MENA debt issuance reached a total of US$69.9 billion in 2023.

INVESTMENT BANKING FEES

• An estimated US$1.2 billion worth of investment banking fees were generated in the Middle East & North Africa during 2023, 31% less than the value recorded during 2022 and the lowest annual total since 2018.  Advisory fees earned from completed M&A transactions in the region totalled US$251.7 million, a 55% decrease from previous year levels and the lowest full year total in five years.  Equity capital markets underwriting fees totalled US$264.1 million, down 40% from 2022 and a three-year low. Syndicated lending fees declined 29% to reach a six-year low of US$438.7 million during 2023, while debt capital markets underwriting fees increased 86% to US$245.8 million. Thirty-nine percent of all MENA fees were generated in the United Arab Emirates in 2023, followed by Saudi Arabia (35%). First Abu Dhabi Bank PJSC earned the most investment banking fees in the region during 2023, a total of US$89.4 million or a 7% share of the total fee pool.

MERGERS & ACQUISITIONS

• The value of announced M&A transactions with any MENA involvement reached US$80.0 billion during 2023, down 7% compared to the previous year and the lowest annual total since 2020.  Although down 18% from 2022’s all-time record annual tally, the number of deals announced in the region during 2023 reached the third highest level since our records began in 1980. Deals involving a MENA target totalled US$31.7 billion during 2023, down 35% from 2022 and a six-year low.  Inbound deals involving a non-MENA acquiror declined 35% to US$8.7 billion, while domestic deals decreased 35% in value to US$23.0 billion. MENA outbound M&A totalled US$44.1 billion in 2023, up 31% from 2022 levels and the highest annual total in sixteen years. The Financials sector was most active, accounting for 27% of MENA target M&A during 2023, followed by the Materials sector with 24%.  The United Arab Emirates was the most targeted nation, followed by Saudi Arabia and Egypt. JP Morgan topped the any MENA involvement announced M&A financial advisor league table during 2023.

EQUITY CAPITAL MARKETS

• MENA equity and equity-related issuance totalled US$13.3 billion during 2023, down 43% from 2022 levels and the lowest full year total since 2020.  The number of issues declined 14% from 2022 but was higher than every other annual count since 2008. Initial public offerings accounted for 81% of activity, while follow-on issuance accounted for 19%. A total of 48 initial public offerings were recorded during 2023, two less than in 2022.  They raised a combined US$10.8 billion, 47% less than the total proceeds raised by IPOs in 2022.  ADNOC Gas PLC raised US$2.5 billion in its stock market debut in March, the largest IPO in the region in 2023 and the largest-ever listing on the Abu Dhabi Securities Exchange.
• The energy & power sector was most active with issuers raising US$4.8 billion, accounting for 36% of total equity capital raisings in the region in 2023.  The financial sector followed, accounting for 21%. First Abu Dhabi Bank PJSC took first place in the MENA ECM underwriting league table during 2023 with a 20% market share.

DEBT CAPITAL MARKETS

• MENA debt issuance totalled US$69.9 billion during 2023, 83% more than the value recorded during 2022 but lower than the annual total recorded during each of the previous six years.  The number of issues declined 14% over the same period.  Saudi Arabia was the most active issuer nation during 2023 accounting for 49% of total bond proceeds, followed by the United Arab Emirates (33%), and Bahrain (6%). Financial issuers accounted for 51% of proceeds raised during 2023, while Government & Agencies accounted for 38%. Islamic bonds in the region raised US$32.0 billion during 2023, an annual record.  Sukuk account for 46% of total bond proceeds raised in the region, compared to 34% last year. Citi took the top spot in the MENA bond bookrunner ranking during 2023 with US$7.6 billion of related proceeds, or an 11% market share.  Standard Chartered PLC took first place in the MENA Islamic bonds league table.