Middle East M&A values up 62% in 1H2018, surpassing global average: M&A transaction values in the Middle East rose 62% y-o-y in 1H2018 to USD 25.4 bn, up from USD 15.7 bn in 1H2017, according to a report from Baker Mckenzie. 65% of all Middle East M&A activity was cross border activity in 1H2018, while domestic transaction values in 1H2018 spiked three-fold driven largely by the pending USD 5 bn merger of Saudi Arabia British Bank and Alawwal Bank in Saudi Arabia. The jump in value of regional M&A activity surpassed the global average growth of 59% y-o-y to USD 2.5 tn. Transaction volumes globally fell 12% y-o-y.

Prospects look good moving forward: "With a handful of standout mega [transactions] and the governments across the Middle East cantering to implement investor-friendly reforms and policies, the region is set to experience promising levels of M&A activity in the second half of the year,” said Omar Momany, Head of Corporate/M&A at Baker McKenzie Habib Al Mulla.

UAE leads inbound and outbound cross-regional transactions: The UAE continued to drive both inbound and outbound M&A in the region, the report said. The value of cross-regional transactions targeting the Middle East increased 174% y-o-y to USD 8.1 bn in 1H2018, from USD 6.4 bn in 1H2017. “The UAE was the most attractive target country to overseas investors in 1H2018, with a total of 34 inbound [transactions] valued at USD 6.6 bn,” the report notes. By value, outbound cross-regional transactions increased 20% y-o-y to to USD 7.6 bn, with volumes up by 9%. “The UAE was the most active acquirer” both by volume and value with more than 75% of the total value of cross-regional acquisitions originating from the Middle East and 35 outbound transactions worth USD 5.8 bn.

The energy sector was the most attractive acquisition target sector for inbound regional investment, both by volume and value in H1 2018, with a total of 15 transactions amounting to USD 7.4 bn.