(Ecofin Agency) - The M&A industry was particularly active in the MEA region (Middle East and Africa) during the first half of 2021; 457 deals were announced over the period, according to data from Capital IQ. This is the highest number of M&A deals in the region since 2018. Q2 2021 alone recorded 242 deals, up 207.2% compared to Q2 2020.
This QoQ comparison is however diluted by two factors. First, the second quarter of 2020 is the period when covid-19 affected the world's economies the most and reduced investor appetite for risk. The second factor is that since the end of March 2021, the promises of implementation of vaccination programs and the reopening of economies have increased incentives. Although the number of M&A transactions was higher in H1 2021, the value of deals announced was lower compared to H1 2020. $33.6 billion was announced in H1 2021, compared to $38.5 billion in H1 2020 and $119.7 billion in H1 2019.
Data also showed that investors’ focus has shifted. The finance sector, which in Q2 2020 was at the top of deal values with over $14.8 billion announced, was no longer even in the Top 5 most attractive sectors in 2021. The industry sector came first in Q2 2021 with nearly $4.5 billion in announced deals, followed by real estate ($2.7 billion), consumption ($2.3 billion), and communication services ($1.14 billion).
In the top 10 deals announced, 4 were in Africa. These include the announcement by Angola's national oil company (Sonangol) to buy all Angolan assets of oil distribution company Puma Energy. Other major deals in Africa were announced in the real estate sector in South Africa, Egypt, and Mauritius.
According to data collected by Ecofin Agency, a total of 260 previously announced M&A transactions in Africa have been closed since January 1, 2021; 143 confirmed announcements remain to be finalized, and there are reports and rumors of a total of 30 deals, including the desire of the Nigerian National Petroleum Corporation (NNPC) to acquire stakes in local refining companies.