Back to the complete issue
Sunday, 13 February 2022

2021 was big for M&A — and tech, education and healthcare should drive activity this year

M&A in Egypt continued to accelerate in 2H2021 as waning pandemic uncertainties and cheap international borrowing rates fuelled a rebound in transaction volumes following the covid shock in 2020, according to a report by Baker McKenzie (pdf) based on Refinitiv data.

The outlook? More of the same, according to Mohamed Ghannam, managing partner at Helmy, Hamza & Partners, Baker McKenzie Cairo Managing, who said large transactions in tech, education, healthcare, oil and gas, and telecoms lead the firm to expect a strong year ahead for M&A. Both domestic and international companies are driving activity.

For the full year in 2021: Companies closed 233 transactions in 2021 (+49% year-on-year) while total transaction value rose 486% to USD 9.9 bn.

The number of transactions rose in the second half: Egypt saw 116 M&A transactions during 2H2021, up from 111 in the first half of the year and up 38% from the same period last year.

As did the value of transactions: Transactions worth USD 4.3 bn closed in the second half of the year, up a bit from USD 4 bn during 1H2021 — and more than 5x higher than the equivalent period in 2020

The second half of 2021 saw the completion of some of the biggest acquisitions of the year, with the Aldar Properties-ADQ consortium finalizing their USD 338.2 mn takeover of leading real estate developer SODIC, and EFG Hermes and the Sovereign Fund of Egypt closing their acquisition of a combined 76% stake in the Arab Investment Bank for USD 241.9 mn.

Cross-border transactions accounted for the bulk of Egypt’s M&A during the period, with domestic acquisitions making up less than 20% of the total value. Most cross-border M&As were inbound, helping to make Egypt the second most popular target country in the world after the US, according to Refinitiv. “This interesting finding further supports the economic growth that the country has been witnessing since the beginning of 2021 and post-pandemic uncertainties in various fields and industries,” said Hani Nassef, M&A partner at Helmy, Hamza & Partners, Baker McKenzie.

The healthcare field was the top-target for inbound investors in terms of transaction value, with a total of USD 1.6 bn for the whole year.

Global M&A had its biggest year on record in 2021: Transactions worth USD 5.9 tn were completed in 2021, which is the biggest year for global M&A since records began in 1980.

And the Middle East region wasn’t bad, either, seeing some USD 49.5 bn worth of transactions during 2H2021 and USD 89.8 bn during the year, up 58% from 2020.

In other M&A news-

Abu Dhabi-based International Holding Co (IHC) is searching for acquisition targets in Egypt, CEO Syed Basar Shueb told Reuters in an interview, without providing further information.

IHC’s Egypt footprint: The Emirati conglomerate owns or has stakes in at least three companies in Egypt, according to data available on its website. Alongside Al Hashemiya for Land Reclamation and Cultivation, which it acquired in April 2020, it also owns 33% of Canal Sugar and in 3Q2021 acquired 49% of the Challenge Egyptian Emirates Marine Dredging Company, a joint venture with the Suez Canal Authority.

IHC could IPO its healthcare business Pure Health in 2Q2022 or early in 3Q after its merger with Abu Dhabi Health Services has been completed, Shueb added. Our friends at Abu Dhabi-based investment firm Chimera Capital is advising on the potential listing, which would see 25-30% of the company’s shares offered to the public, he said. The article doesn’t specify where the company would be listed.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.