The volume of merger and acquisition deals in the Middle East declined by 58% and 26% respectively in the first half (H1) of 2020 compared to the previous year.
The drop in deals came despite a late surge in activity in May and June, according to the data provided by law firm Baker McKenzie.
However, the figures were in line with global trends and a 41% decline in M&A deals in H1 as a result of the Covid 19 pandemic. The slump in activity reached its steepest decline in April when volume fell by 34% and value fell by 69%.
But the significant uptick in M&A deals in the region in June, led by sovereign wealth funds, suggests that any recovery in volume will be Mena-based.
According to Bloomberg data, M&A deals in Gulf states was up by tenfold in June in comparison to this time last year.
“Covid-19 has had a significant impact on M&As across the region,” said Omar Momany, partner and head of the Corporate M&A Practice Group at Baker McKenzie Habib Al Mulla.
“However, the dramatic increase in the value of deals made during the final two months of H1 2020 showcases a positive outlook and an early recovery sign for M&A activity for the remainder of the year.
“As the world begins to emerge from Covid-19, we can expect markets to begin to bounce back leading to more opportunities for investment, distressed M&As and consolidation within the region,” added Momany.
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