Further reasons for optimism (and caution) on Middle East M&A. Why Qatar may be the place to be for investment bankers

There is, to coin a cliché, some cautious optimism around the Middle East M&A market. Barclays views the region as key to growth, many are tipping the remainder of the year to witness a surge in deals and now it’s emerged that the value of deals last month was the highest since September 2008.

However, before you jump for joy, it’s worth pointing out that although the value of deals surged to $6.8bn in August, according to new figures from the Zephyr M&A report, the actual number remains subdued, as the chart below shows.

In fact, just two deals dominated the M&A landscape in August – Qatar Petroleum’s decision to reduce its stake in Industries Qatar (worth $3.9bn) and the $2.2bn acquisition of the National Mobile Telecommunications Company by Qatar Telecom.

What does this say about the state of Middle East targeted M&A? Unfortunately, it’s difficult to draw many conclusions.

While Qatar appears to be the main focus of deal activity, this was only the case in August – in July there were no deals and this time last year just $439m worth of transactions were started.

Saudi looks like it should also be an active market, but after a healthy July when $1.8bn worth of deals were targeted there, nothing happened in August. What this suggests is a patchy landscape, where mega-deals can shape the sentiment around a particular country.