(MENAFN- Khaleej Times) Deal activity in the Middle East fell sharply between July and September to the lowest recorded in the last eight quarters, while volume slipped by almost a third from the second quarter of 2013, according to the latest series of mergers and acquisitions, or M&A, reports from Zephyr, the M&A database published by Bureau van Dijk.
There were 62 transactions recorded worth a collective $441 million in the third quarter, marking the fourth decline in a row by value and significantly down on the same period a year ago. The value for the quarter was the lowest recorded since the first quarter of 2004. A notable lack of high-value deals during the third quarter suppressed value as just one transaction topped $100 million - an agreement by Aseer Trading, Tourism & Manufacturing Company to acquire 38 per cent of shares from four current stockholders in Al Essa Industries Company, an air-conditioner and freezer manufacturer based in Saudi Arabia.
Deal-making in the regions banking sector, which can usually be relied on to prop up overall value, was considerably weaker during the three-month period.
Asia-Pacific and Central Asian M&A results were mixed in the third quarter, with volume dropping 21 per cent while value was up four per cent. In total, there were 4,062 transactions worth $154,854 million during the quarter, representing the lowest value result of the last two years.
However, the declining volume recorded in M&A activity was not replicated in private equity and venture capital deal-making, which increased on both fronts; 167 deals worth $1,764 million were recorded in the second quarter of 2013, while 204 deals worth $6,377 million were recorded in the third. Although volume was up, the increase in value was more significant, coming in more than three times higher than the second quarter. The increase in private equity investment value was again boosted by two large transactions worth a combined $2,956 million, representing 46 per cent of the $6,377 million invested in companies in the region.
The reports also revealed that the value of M&A-targeting companies based in North America during the third quarter was given a huge lift by a number of big-ticket deals and strong private equity investment. Deal value for the three months increased by 48 per cent to $410,552 million from $277,449 million in the previous quarter and 45 per cent from $282,216 million in the third quarter of 2012, marking the highest point of the last two years under review.
M&A targeting Western Europe-based companies continued to form a series of peaks and troughs in the third quarter 2013 as volume fell back 13 per cent and value weakened at a faster rate of 29 per cent to 4,797 deals worth a combined ‚¬159,848 million from 5,499 transactions valued at ‚¬224,029 million in the second quarter. Central and Eastern Europe failed to sustain gains made in the second quarter as volume slipped eight per cent over the quarter to 1,963 deals and volume more than halved to ‚¬22,790 million.
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