DOHA: Qatar’s overseas acquisitions accounted for 46 percent of Middle Eastern mergers and acquisitions (M&A) activity during the first half of 2014, according to Thomson Reuters’ latest quarterly investment banking analysis for the region.
The largest deal during the first half of 2014 was Labregah Real Estate Company’s purchase of a $2.5bn (QR9.1bn) stake in Barwa Commercial Avenue Co.
Boosted by this deal, real estate was the most targeted sector, accounting 29 percent of first half activity.
Bank of America Merrill Lynch topped the first half of 2014 and announced the Middle Eastern involvement of M&A league table of $4bn. The value of announced M&A transactions with any Middle Eastern involvement reached $14bn (nearly QR51bn) during the second quarter of 2014, two-and-a-half times the value registered during the previous quarter and the highest quarterly total since the first quarter of 2011.
Nadim Najjar (pictured), Managing Director, Middle East and North Africa, Thomson Reuters said: “ Middle Eastern equity and equity-related issuance during the first half of 2014 totalled $2.9bn, a 6 percent increase in activity from the corresponding period in 2013 ($2.8bn). Middle Eastern debt issuance reached $18bn during the second quarter of 2014, the all-time highest quarterly total recorded in the region.”
On investment banking fees, Najjar pointed out that despite the quarterly uptick, fees earned during the first half of 2014 registered a 19 percent decline from the same period in 2013 to $375.9m. Fees from completed M&A transactions totalled $110.9m during the first six months of 2014, up 3 percent from the same period in 2013, and accounting for 29 percent of this year’s overall Middle Eastern fee pool.
“Equity capital markets underwriting fees totalled $99.4m, up 187 percent from the amount registered during the first half of 2013 ($34.6m) and marking the best first half total for ECM fees in the Middle East since 2009. ECM fees account for 26 percent of the fee pool. Fees from debt capital markets underwriting declined 39 percent year-on-year to $64.5m, while syndicated lending fees fell 53 percent to $101.2m,” he added.
Najjar noted: “Lazard earned the most investment banking fees in the Middle East during the first half of 2014, a total of $29.4m for a 29 percent share of the total fee pool. Lazard topped the Middle Eastern completed M&A fee league table, while Qatar National Bank was first in the ECM underwriting fee rankings. HSBC and National Bank of Abu Dhabi took the top spots in the Middle Eastern DCM and loans fee rankings, respectively.”
Commenting on M&A transactions, he pointed out that value of M&A deals during the first half of 2014 declined 4 percent from the same period last year to $19.7bn. Domestic and inter-Middle Eastern M&A declined 49 percent from the first half of 2013 to $6.9bn during the first six months of 2014.