Muscat: The number of closed merger and acquisition (M&A) transactions in the Gulf Cooperation Council (GCC) during the third quarter of 2018 were the same compared to the third quarter of 2017, and 26 per cent lower compared to the second quarter of 2018, according to Kuwait Financial Centre's (Markaz’s) report.
Among the region, transactions in Bahrain witnessed the highest growth, while Saudi Arabia reported the sharpest decline in the number of transactions during the same period. There were no closed transactions involving Qatari targets during third quarter of 2018.
Acquirers and targets
According to the report, GCC acquirers accounted for 69 per cent of the total closed transactions, while foreign acquirers accounted for 24 per cent of the total number of transactions during the third quarter of 2018. Buyer information was not available for 7 per cent of the transactions during the same period.
Markaz noted that each of the GCC acquirers seemed to have a different appetite with regards to M&A transactions during the 2018 third quarter. Kuwaiti acquirers preferred investing in their home country. Saudi acquirers mostly invested in the GCC region. UAE, Qatari, and Bahraini acquirers preferred investing outside the GCC. Omani acquirers didn’t engage in any transactions either within or outside the GCC during 2018 third quarter.
The third quarter of 2018 witnessed a 13 per cent decline in the number of completed transactions by foreign buyers compared to the 2017 third quarter. In comparison to 2018 second quarter, the number of such transactions decreased by 36 per cent.
UAE targets represented 100 per cent of the closed transactions by foreign acquirers during the 2018 third quarter, similar to the same period in 2017. Saudi Arabia was the only country other than the UAE that seemed to attract foreign acquirers during the 2018 second quarter.
The financials and information technology sectors witnessed the highest number of transactions, accounting for 42 per cent of the total transactions. The healthcare, media, and utilities sectors each accounted for 3 per cent of the total number of transactions during the 2018 third quarter.
There were a total of 11 announced transactions in the pipeline during the 2018 third quarter, representing a 35 per cent decrease in the number of announced transactions compared to 2018 second quarter.
UAE, Kuwait and Qatar collectively accounted for 82 per cent of the announced transactions during 2018 third quarter. Bahrain and Saudi Arabia made up 18 per cent of the announced transactions.
Kuwaiti companies have been targeted in 4 of the top 5 GCC M&A transactions during 2018 third quarter. The top reported deal value during 2018 third quarter was $491 million and involved United Energy Group reaching an agreement to acquire 100 per cent of Kuwait Energy.