May 23, 2017

Clyde & Co’s Middle-East deal study reveals consistent deal volumes with a drop in value

Clyde & Co has released its 2017 Middle-East Deal Study, which shows that, while the number of deals has remained consistent, deal values have dropped. The third edition of this annual report, which is the only one of its kind in the region, observes trends and developments in the mergers and acquisitions (M&A) and joint ventures (JV) market by analysing data from 78 corporate transactions on which Clyde & Co worked during the past 18 months in the Middle East and compares this to previous years' data.

According to the study, the number of deals has remained consistent while deal values have dropped - 44 M&A deals for an aggregated value of USD2bn over the 2015/2016 period vs. 43 deals for an aggregated value of USD6.5bn over 2013/2014 - perhaps reflecting the more challenging market conditions over the last two years. Healthcare led the way with the highest levels of deal activity, followed by the education and technology sectors. There is also growing evidence of market maturity, as we continue to see a shift towards more sophisticated purchase price adjustment mechanisms, such as completion accounts and locked box, more extensive warranty protections and an increase in earn outs.

The Clyde & Co data also finds that the DIFC continues to be the dominant dispute resolution forum with DIFC/LCIA arbitrations continuing to become more established and known to the parties in the region. JVs are still as popular as ever in the region (across most sectors), and the regional free zones are being increasingly perceived as stable jurisdictions with advantageous foreign ownership and compliance requirements.

Philip O'Riordan, Partner and Regional Head of Corporate, says: “The findings of the study indicate a positive deals outlook throughout the GCC across a variety of sectors. The Middle East market remains dynamic and there is cautious optimism that this trend may continue, and that developing sectors, such as technology, may fuel an increase in deal activity in the near future. Our study provides investors with a unique insight into trends, attitudes to risk allocation and what could be considered as market practice for M&A and JV agreements in the region that will help in the successful implementation of their transactions".

Clyde & Co has the largest corporate legal practice in the Middle East with 20 partners and over 70 experienced lawyers who have forged a reputation as a go-to firm for M&A and JV transactions. Clyde & Co has assisted clients in realising their investments, gaining access to new markets through organic growth/strategic acquisitions and in achieving their corporate objectives for more than 25 years in its key focus sectors of insurance, education, energy, healthcare and defence & security. The firm was recently named Middle East Pharma, Medical & Biotech Legal Advisor of the Year at the Mergermarket M&A Awards 2017. 

If you would like to request a copy of the Study, please contact