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Business / Qatar Business

Qatar records robust cross-border M&A deals in Q2

Published: 15 Aug 2018 - 03:22 am | Last Updated: 02 Nov 2021 - 11:15 am
Peninsula

By Satish Kanady I The Peninsula

DOHA: The number of closed M&A transactions in the GCC recorded a 86 percent growth in the second quarter of 2018 (Q2, 18) compared to Q2,17.

The industrials sector witnessed the highest number of transactions, accounting for 20 percent of the total transactions. The energy, healthcare, education, media and telecommunication services sectors each accounted for 3 percent of the total number of transactions during Q2, 18.

Each of the GCC acquirers seemed to have a different appetite with regards to M&A transactions during Q2,18. Qatari acquirers invested within the country, other GCC countries and foreign countries as Kuwaiti and Saudi acquirers preferred to invest in their home countries. UAE and Omani acquirers preferred investing outside the GCC, according to Kuwait Financial Centre (Markaz).

The second quarter of 2018 witnessed an 8 percent increase in the number of closed transactions as compared to the previous quarter. UAE had the highest number of transactions among its GCC counterparts followed by Kuwait.

There was a total of 17 announced transactions in the pipeline during Q2, 18, representing 42 percent increase in the number of announced transactions compared to Q1, 18.

A consortium of buyers from Qatar and China acquired a 100 percent stake in a company in one of the neighbouring countries for a total of $272m. The top reported deal value during the second quarter was $5bn, involving the announced merger of Saudi British bank (SABB) and Alawwal Bank. Both banks are 40 percent owned by foreign banks with SABB being owned by HSBC and Alawwal by the Royal Bank of Scotland, Markaz said.

The second quarter witnessed a 267 percent increase in the number of completed transactions by foreign buyers, compared to the previous quarter. In comparison to Q1, 18 the number of such transactions increased by 10 percent.

GCC acquirers accounted for 69 percent of the total number of transactions during the second quarter and 67 percent and 67 percent during the first quarter. Non-GCC acquirers accounted for 28 percent of the total number of transactions during Q2, 18 and Q1, 18.

The Industrials sector witnessed the highest number of transactions, accounting for 20 percent of the total closed transactions. The Consumer Discretionary, Financials, Consumer Staples, and Information Technology sectors each accounted for 15 percent of the total closed transactions during the second quarter; collectively accounting for 60 percent of the transactions during the period.

The Energy, Healthcare, Education, Media, and Telecommunication Services sectors each accounted for 3 percent of the total number of transactions during the second quarter.

A breakdown of Qatari acquisition showed, in addition to the acquisition of a 100 percent stake in a company in one of the GCC countries, Mannai Corporation acquiring an additional 15 percent stake in France’s Gfi Informatique for a total of $102m.

The transaction has increased Mannai’s stake in Gfi Informatique to 96 percent.

Another top transaction involved Qatar Industrial Manufacturing acquiring a 33 percent stake in Qatar Plastic Products, thereby increasing its portfolio of industrial companies.