With the rise in frequency of mergers & acquisitions (M&A) in Africa, the 26 percent growth of M&A in the Middle East this year and the global volume and value of M&A at its highest for years in the first three quarters of 2014, global M&A activity is expected to continue its growth through 2014 and into the first quarter of 2015. Latham & Watkins recently hosted, in collaboration with PwC and the Dubai Economic Counsel (DEC), an industry event entitled ‘Megatrends in Mergers & Acquisitions’ at the Dubai International Financial Centre (DIFC). The event was held under the Patronage of Sultan Bin Saeed Al Mansouri, Minister of Economy, UAE.
The following is a brief overview of 3 key regional opportunities discussed at the event:
1. Evolving M&A Landscape in the Middle East
The United Arab Emirates (UAE) is considered the nineteenth most attractive country globally for M&A, with recent significant growth in both inbound and outbound M&A transactions. The growth is attributed to factors such as lower cost of debt, increase in globalization, liquidity and appetite for risk. Aramex, a leading global provider of logistics and transportation solutions based in the UAE, have put in place a successful growth model of franchise and majority acquisition, most recently announcing that revenues were at a 12 percent increase compared with last year.
2. Growth of M&A in Africa
Having had a slow start to the year, M&A deals in Africa have now greatly increased. Although principally the main deals have been in the energy sector over the last few years, there is now a real interest from companies wanting to invest in sectors reaching African consumers, such as financial services, telecoms, healthcare and retail. Private equity is also set to be critical to Africa’s economic growth.
3. Investment Climate in Russia/CIS
The geopolitical conflict happening in Eastern Europe and Western sanctions have slowed investment growth in Russia. As energy assets have been effectively nationalised, there is particular M&A growth in sectors such as consumer and telecoms. For example, investment is expected from specialist investment funds to drive development in the Russian e-commerce market, one of the world’s fastest growing online markets.
Click here to view further discussion by Latham & Watkins partners on these and other Middle East M&A considerations.