There were 84 mergers or acquisitions done in the Middle East and North Africa in the first quarter, compared with 115 deals in the first three months of last year.
The research by consultancy EY also found that less than half (47%) of MENA-based executives expected deal activity to increase in the next 12 months. However, this proportion was an improvement from 21% who said the same when surveyed six months ago.
“Although MENA executives are more confident about economic fundamentals, with 83% believing that corporate earnings are improving and stable at the local level, MENA companies are struggling to secure loans as liquidity among banks and other financial institutions continues to be tight,” said Phil Gandier, MENA transaction advisory services leader for EY. “However, we expect this to improve in 2017, as some countries look to increase interest rates.”
Gandier added that many MENA firms expected a slowdown in global trade flows and an increase in protectionism.
“Increasing government intervention in the region, both by establishing new laws or regulations, or through vocal public pronouncements, could impede economic growth over the next year,” he warned.
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