The United States was the top country for acquisitions with a combined value of $129.4 billion in inbound and outbound deals, but the Middle East saw deal values spike 517 percent, according to the latest report from global law firm Baker McKenzie.
Cross-border mergers and acquisitions (M&A) grew in major markets during the third quarter of 2017 compared to the previous quarter, despite macroeconomic uncertainties in the Middle East, according to the latest report from global law firm Baker McKenzie.
Globally, the U.S. was both the most acquisitive and the top targeted region, with 484 inbound deals valued at $50 billion and 536 outbound deals valued at $79.4 billion, the report stated. In Europe, cross-border deal value year-to-date was up 44 percent compared to 2016, despite slowdowns involving the United Kingdom. In Asia, Chinese outbound deal value increased 44 percent as well from the previous quarter, while Japan cross-border deal value doubled.
In the Middle East, 70 percent of deals were cross-border in nature in the third quarter. While overall deal activity dropped 10 percent compared to the previous quarter, cross-regional deal volumes increased 5 percent and the value of domestic deals rose a stunning 517 percent, the report noted. However, this spike was largely driven by the Saudi Arabian mega deal in which Kingdom Holding Co., acquired Banque Saudi Fransi for $1.54 billion.
“Strong economic fundamentals and ambitious growth strategies of countries such as the UAE and Saudi Arabia continue to draw investors to the Middle East, despite macroeconomic uncertainties,” said Will Seivewright, partner at Baker McKenzie Habib Al Mulla. “The convergence of technology with traditional sectors such as retail – exemplified by Amazon’s acquisition of UAE’s Souq.com – underlines the drive for innovation and demand for smart technology that is contributing heavily to deal activity in the region.”
The report noted that the Financial Services and Industrials sectors in the UAE were the busiest sectors for inbound by volume, while the Retail sector led by deal value.The top sector by volume for outbound M&A in the third quarter was Technology, with seven deals, and the top sector by value was the Real Estate sector, with $350 million worth of deals.
The report found that the UAE was the top target country for inbound investment by both volume and value in the third quarter, attracting 18 deals valued at $598 million. The UAE was also the top bidder country by volume, followed by Bahrain and then by Kuwait. India and the United Kingdom were the top target countries for outbound M&A by deal volume, with four deals each, and the US was the top target country by deal value, with $395 million worth of deals.
Report: Global cross-border M&A on the rise in Q3 2017
