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A new report published global professional service firm Ernst & Young reveals that in 2009 the number of mergers and acquisitions in the Middle East and North Africa (MENA) region slumped by a massive 67 percent.

The value of deals last year fell from US$102 billion in 2008 to US$34 billion as a result of the effects of the global financial crisis. The number of deals hammered out also fell by a worrying 24 percent, from 465 in 2008 to 353 in 2009.

Arabian Business reports that whilst the number of outbound deals was down 42 percent from 160 in 2008 to 92 in 2009, the number of inbound deals was up six percent from 66 in 2008 to 70 deals in 2009.

In the fourth quarter of last year things got particularly bad as M&As froze up and the value of deals in the region shrank by 73 percent.

"A decline in asset values"

Phil Gandier, head of transaction advisory services at Ernst and Young Middle East, said: "Regional and foreign acquirers are looking at regional firms for consolidation or expansion of their business during the downturn and they are looking for concessions. A clear M&A trend shows companies are moving away from half a billion dollar deals to smaller and medium-sized deals, reflecting a decline in asset values. Average deal size decreased from US$351m (2008) to US$189m (2009)."

M&A's are expected to recover through 2011 though, and one industry likely to drive this recovery is the telecoms sector. Telecom M&A deals in the MENA region have the potential to breach the US$30 billion mark in 2010, subject to the successful sale of Zain Africa, according to Dominic Lowndes, the Editor of Telecom Deal Alert,and organiser of TMT Finance Middle East 2010.

Speaking in advance of the leading industry event, TMT Finance Middle East 2010 Conference & Awards in Doha, Mr Lowndes outlined the potential deals that are being discussed among the investment community in MENA.

They include Zain Africa, Orascom Algeria, Meditel Morocco, Korek Telecom, infrastructure and tower assets of Zain Africa, MTN, Cell C, Millicom and Saudi Telecom Corp.; the potential privatisations of Turk Telecom and Batelco, as well as mobile licence sales in Lebanon.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

After a catastrophic 2008, the Gulf Cooperation Council (GCC)-owned Gulf Investment Corp (GIC) have shown signs of an extraordinary recovery after announcing that last year saw them make a net profit of US$91 million.

Two years ago, thanks to the global financial meltdown, the GIC posted huge losses worth US$966 million. The Kuwait-based company that is owned by the six member countries of the GCC (Bahrain; Kuwait; Oman; Qatar; Saudi Arabia and the United Arab Emirates) said its shareholders' equity rose to US$1.75 billion at the end of last year, an increase of more than US$1.1 billion in 2008.

Located in the largest crude exporting region in the world, the GCC holds around 45 percent of the global oil reserves and contributes 16 million barrels of crude oil per day.

The GIC said in a statement its shareholders equity totalled 1.75 billion dollars at the end of 2009, seeing an increase of 1.1 billion dollars over 2008, despite that the global financial market was ravaged by widespread and merciless crisis.

GIC chief Hisham al-Razzuqi claims that the group has significantly improved its bottom line as well as cutting overall leverage and increasing its capital base.

"The initiatives to mitigate risks, de-leverage the balance sheet, optimise resource allocation and strengthen systems that were implemented have borne fruit, and the corporation is now well positioned to take advantage of the emerging opportunities.

"We are now on a solid platform for continued profitability and growth," he said.

Established in 1983 the GIC which has authorised capital of US$2.1 billion, focuses on developing private enterprise and economic growth in the Gulf market by offering financial products and services.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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