MENA Investment Banking Review First Quarter 2020 Refinitiv Deals Intelligence 1 QUARTERLY HIGHLIGHTS HIGHLIGHTS M&A FEES UP 266% M&A TOP FINANCIAL ADVISOR YTD ECM FEES UP 263% Barclays DCM FEES DOWN -47% ECM TOP BOOK RUNNER YTD LOAN FEES UP 9% EFG Hermes, Jadwa Investment Co, Riyadh Bank Ltd ANY INV. M&A DOWN -85% DCM TOP BOOK RUNNER YTD TARGET M&A DOWN -91% Standard Chartered PLC ECM PROCEEDS UP 338% Click on any of the above arrows to go straight to the analysis. DCM PROCEEDS DOWN -40% CLICK BELOW TO SIGN UP FOR OUR NEWSLETTERS, PURCHASE CUSTOMIZED DATA OR FOLLOW US ON SOCIAL MEDIA: 2 REPORT SUMMARY INVESTMENT BANKING FEES Investment banking fees in the Middle East and North Africa reached an estimated US$188.8 million during the first quarter of 2020, up 11% from last year’s slow start, with triple-digit gains recorded across M&A advisory and equity underwriting fees. Advisory fees earned from completed M&A transactions generated US$58.4 million, up 266% year-on-year and the highest first quarter total since 2017. Equity capital markets underwriting fees more than tripled to reach US$15.9 million, while bond underwriting fees declined 47% to a four-year low of US$45.4 million. Syndicated lending fees increased 9% to US$69.1 million. The financial and industrial sectors each accounted for 25% of total investment banking fees earned in the region during the first quarter of 2020, and almost half of all fees were generated by companies located in the United Arab Emirates. Jefferies LLC earned the most investment banking fees in the region during the first quarter of 2020, a total of US$27.8 million or a 14.7% share of the total fee pool. MERGERS & ACQUISITIONS The value of announced M&A transactions with any MENA involvement reached US$14.8 billion during the first three months of 2020, 85% less than the value recorded during the same period in 2019 which reached a record high with Saudi Aramco’s agreement to buy a 70% stake in Saudi Basic Industries Corp from the kingdom’s wealth fund for $69.1 billion. The number of deals has increased 4% over the same period. Monthly M&A has increased in value for the third consecutive month, with March 2020’s US$6.1 billion marking the highest monthly total in 11 months. At the beginning of March, Austrian oil company OMV announced that it would increase its stake in plastics maker Borealis in a deal worth $4.7 billion, the largest deal of the quarter. Although the second highest first quarter total in the last decade, domestic M&A registered a 92% decline from last year to US$6.9 billion, again due to the Aramco / Sabic deal. Inbound M&A, involving an acquiror from outside of the region, declined 88% to a four-year low of US$1.8 billion, while outbound M&A declined 53% to US$1.4 billion. Deals in the industrials sector accounted for 43% of MENA target M&A activity during the first quarter of 2020. The United Arab Emirates was the most targeted nation, followed by Egypt and Qatar. Barclays topped the any MENA involvement announced M&A financial advisor league table during the first quarter of 2020 with a 49% market share. EQUITY CAPITAL MARKETS MENA equity and equity-related issuance totaled US$782.9 million during the first quarter of 2020, more than four-times the value recorded during the same period last year, despite a 50% decline in the number of deals. One initial public offering was recorded during the first quarter. Saudi Arabian private healthcare operator, Dr. Sulaiman Al Habib Medical Group, raised US$699.7 million on the Saudi Stock Exchange at the beginning of March. EFG Hermes, Jadwa Investment Co, and Riyadh Bank Ltd shared first place in the MENA ECM league table during the first quarter of 2020. DEBT CAPITAL MARKETS MENA debt issuance totalled US$19.5 billion during the first quarter of 2020, down 40% from the value recorded during the same period in 2019, and a four-year low. After a strong start, with over US$9 billion raised in both January and February, March issuance slowed to just US$571.9 million, marking the lowest monthly total since August 2019. Saudi Arabia and Qatar were the most active issuer nations with US$9.9 billion and US$5.0 billion in bond proceeds, respectively. Saudi Arabia’s US$4.9 billion bond sale in January was both the largest MENA bond sale and the only government bond sale in the region during the first quarter of 2020. Standard Chartered took the top spot in the MENA bond underwriter ranking during Q1 2020 with US$5.6 billion of related proceeds, or a 29% market share. 3 BACK TO MENA HIGHLIGHTS INVESTMENT BANKING FEES PAGE INVESTMENT BANKING FEES VOLUMES TOP FEE PAYING INDUSTRIES TOP FEE PAYING COUNTRIES YTD Fees Rest of Year Fees 1,600 • Outer Rim: 2020 • Inner Rim: 2019 1,400 12% 16% 1,200 25% 6% 17% 12% 1,000 26% 22% 8% 7% 800 7% 16% 47% US$Million 600 1% 8% 5% 400 20% 13% 200 48% 25% 25% 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 13% 20% INVESTMENT BANKING FEES BY ASSET CLASS Financials High Technology United Arab Emirates Bahrain BONDS EQUITY LOANS MA Industrials Healthcare Saudi Arabia Egypt 250 Government and Agencies Other Qatar Other 200 150 100 US$Million 50 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 4 BACK TO MENA HIGHLIGHTS MERGERS & ACQUISITIONS PAGE ANY INVOLVEMENT M&A VOLUMES & NUMBER OF DEALS TOP TARGETED INDUSTRIES TOP TARGETED COUNTRIES YTD (US$ bil) Rest of Year (US$ bil) # Deals $160 300 • Outer Rim: 2020 • Inner Rim: 2019 $140 5% 1%1% 250 6% 2% $120 11% 7% 3% 200 8% $100 19% $80 150 43% 12% $60 51% 100 $40 50 34% $20 95% 72% $0 - 27% 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 TARGET M&A VOLUMES & NUMBER OF DEALS YTD (US$ bil) Rest of Year (US$ bil) # Deals $120 160 Industrials High Technology United Arab Emirates Kuwait 140 Telecommunications Real Estate Egypt Saudi Arabia $100 120 Materials Other Qatar Other $80 100 $60 80 60 $40 40 $20 20 $0 - 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 5 BACK TO MENA HIGHLIGHTS MERGERS & ACQUISITIONS PAGE ANY INVOLVEMENT M&A MONTHLY VOLUMES Value (US$ bil) # Deals $80 120 $70 100 US$69b Saudi Aramco / SABIC $60 80 $50 $40 60 $30 40 $20 20 $10 $0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 6 BACK TO MENA HIGHLIGHTS MERGERS & ACQUISITIONS PAGE INBOUND M&A DOMESTIC M&A OUTBOUND M&A Inbound M&A declined 88% to US$1.8 billion during Domestic M&A declined 92% to US$6.9 billion Outbound M&A declined 53% to US$1.4 billion Q1 2020. during Q1 2020. during Q1 2020. YTD (US$ bil) Rest of Year (US$ bil) # Deals YTD (US$ bil) Rest of Year (US$ bil) # Deals YTD (US$ bil) Rest of Year (US$ bil) # Deals $20 80 $100 120 $80 100 $90 $18 70 $70 90 100 $16 $80 80 60 $60 $14 $70 70 80 $12 50 $60 $50 60 $10 40 $50 60 $40 50 $40 $8 30 $30 40 40 $6 $30 30 20 $20 $4 $20 20 20 10 $2 $10 $10 10 $0 - $0 - $0 - 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 INBOUND M&A VOLUMES DOMESTIC M&A VOLUMES OUTBOUND M&A VOLUMES TOP TARGETED / TOP ACQUIRING NATIONS TOP TARGETED / TOP ACQUIRING NATIONS TOP TARGETED / TOP ACQUIRING NATIONS US$ Million US$ Million US$ Million US$ Million US$ Million US$ Million United United United United United Arab $1,316 States of $1,381 Arab $3,090 Arab $3,091 States of $823 Bahrain $521 Emirates America Emirates Emirates America United Saudi Egypt $448 Unknown $214 Egypt $2,474 $2,543 Bermuda $300 Arab Arabia $352 Emirates Bahrain $65 India $130 Qatar $1,000 Qatar $1,000 Belgium $98 Qatar $303 7 BACK TO MENA HIGHLIGHTS MERGERS & ACQUISITIONS PAGE ANY INVOLVEMENT M&A TOP DEALS YTD Value Acquiror Parent Status Rank Date Target Name Target Nation Target Industry Acquiror Name Target Financial Advisor Acquiror Financial Advisor ($Mil) Nation 4,680.0 Pending 3/6/2020 Borealis AG Austria Materials OMV AG Austria Barclays Citigroup Global Markets Ltd Deutsche Bank 2,717.9 Pending 2/17/2020 DP World PLC Utd Arab Em Industrials Port & Free Zone World Fze Utd Arab Em Rothschild & Co Aktiengesellschaft London Branch 2,392.0 Pending 1/29/2020 Vodafone Egypt Telecommun SAE Egypt Telecommunications Saudi Telecom Co Sjsc Saudi Arabia Citi Barclays 1,000.0 Pending 2/3/2020 Etihad Airways-Com Air Por(38) Utd Arab Em Industrials Altavair LP United States 1,000.0 Pending 3/8/2020 Qatar Fertilizer Co PSC Qatar Materials Qatar Petroleum Corp Qatar 300.0 Completed 2/11/2020 Fidelis Insurance Holdings Ltd Bermuda Financials Investor Group Utd Arab Em Evercore Partners 272.3 Completed 2/11/2020 Residential And Coml Ppty(2) Utd Arab Em Real Estate ESIC - Sole Prop LLC Utd Arab Em 232.2 Completed 2/18/2020 Fawry Bkg & Payment Tech Svcs Egypt High Technology Investor Group United States 225.0 Completed 1/15/2020 Califia Farms LP United States Consumer Staples Qatar Investment Authority Qatar Barclays PLC 190.6 Completed 1/20/2020 Shangri-La Asia Ltd- Dubai Utd Arab Em Media and Entertainment Undisclosed Acquiror Unknown 8 BACK TO MENA HIGHLIGHTS EQUITY CAPITAL MARKETS PAGE ECM YTD PROCEEDS ECM MONTHLY PROCEEDS US$29.6 bln with YTD Proceeds Rest of Year Proceeds Aramco IPO Proceeds (US$ mil) # Issues 35,000 3,000 6 30,000 2,500 5 25,000 2,000 4 20,000 1,500 3 15,000 US$Million US$Million 1,000 2 10,000 5,000 500 1 0 0 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 2015 2016 2017 2018 2019 2020 ECM YTD PROCEEDS BY ISSUE TYPE TOP ISSUING COUNTRIES YTD Proceeds YTDLY Proceeds IPO Follow-On Convertible 4,500 US$ Million 0 100 200 300 400 500 600 700 800 4,000 700