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I 2020’s Biggest Mergers And Acquisitions In
By Jamila Gandhi
LEADERBOARD • INVESTING
2020’s Biggest Mergers And Acquisitions In The Middle East
Despite the turbulent year that 2020 has been, some companies in the Middle East have managed to expand their businesses and secure acquisitions. Here’s a look at some prominent mega-deals of 2020.
ADNOC Gas Pipelines
Deal value: $20.7 billion
In one of the largest ever global energy infrastructure transactions, the Abu Dhabi National Oil Company (ADNOC) announced in June a $20.7 billion Energy Infrastructure Deal in its gas pipeline business, which will bring $10.1 billion in foreign direct investment into the U.A.E. from a variety of international investors. ADNOC will still hold a 51% majority stake. ADNOC Gas Pipeline is a newly formed subsidiary of ADNOC with lease rights to 38 gas pipelines covering 982.3 kilometers.
Saudi Aramco and the Saudi Basic Industries Corporation (SABIC)
Deal value: $69.1 billion
Saudi Aramco acquired a majority stake of 70% in SABIC from the Saudi Public Investment Fund by signing a share purchase agreement in a deal valued at $69.1 billion in June. The deal’s loan payments will be paid between August 2, 2020, and April 7, 2028. Aramco has also agreed to put down an advance payment of $3 billion in April 2022, depending on certain oil market conditions in 2021. The acquisition will enhance Aramco’s chemical strategy by increasing the resilience of cash flow generation, expanding procurement capabilities, supply chain, manufacturing, and integrating upstream and refining with SABIC, among other benefits.
Abu Dhabi Power Corporation (ADPower) and the Abu Dhabi National Energy Company (TAQA)
Deal value: Unknown In July, TAQA announced the completion of its transaction with ADPower, creating one of the largest utility companies in Europe, the Middle East, and Africa. As part of the deal, ADPower will transfer most of its power and water generation, transmission, and distribution assets to TAQA and own 98.6% of the entire share capital of TAQA. With the completion of the transaction, TAQA, which is listed on the Abu Dhabi Securities Exchange, became the largest company in the U.A.E. with a market cap of $44.65 billion, as of November 25, 2020.
Tabreed and Emaar
Deal value: $675 million
Tabreed’s acquisition of an 80% stake in Emaar Properties PJSC’s Downtown Dubai district cooling business marked the sale of the world’s largest district cooling scheme. Emaar will retain a 20% stake as part of a long-term partnership with Tabreed. With this deal, Tabreed’s extensive portfolio now includes the Burj Khalifa, Dubai Mall, Dubai Opera and the RTA’s Dubai Metro.
Oman Arab Bank (OAB) and Alizz Islamic Bank (AIB)
Deal value: Unknown OAB completed its acquisition of AIB through a share swap in July, in a deal that will create a banking entity with more than $8.3 billion in assets. The Oman International Development and Investment Company (Omnivest), the parent company of OAB, said that the bank’s shares listed on the Muscat Securities Market. Upon the merger’s completion, the business of Al Yusr, the Islamic Banking window of OAB, will be integrated with AIB, creating a larger full-fledged and licensed Islamic bank.
Siraj Holding and Al Hilal Takaful
Deal value: Unknown Siraj Holding, a private investment firm, acquired Al Hilal Takaful from ADCB Group’s Al Hilal Bank in July for an undisclosed sum. The acquisition is expected to strengthen the Shari’ah-compliant insurance offerings in a market with a limited number of Takaful institutions with elevated clientele services. Siraj Holding plans to rebrand and align Al Hilal Takaful with its operating model on completion of regulatory formalities.
Deal value: $14.8 billion
In October, Saudi Arabia’s NCB and Samba Financial Group agreed to merge in a deal that is valued at $14.8 billion. On completion, NCB’s existing shareholders will own 67.4%, and Samba’s shareholders will own 32.6% of the merged entity. The merger will create a regional powerhouse with $223 billion in assets. The merged bank will become the largest bank in the kingdom and a leading bank in the Middle East with more than $46 billion in market capitalization.
Dubai Islamic Bank (DIB) and Noor Bank
Deal value: Unknown DIB completed its acquisition of Noor Bank in November 2020 to become one of the largest Islamic banks in the region, with assets exceeding $81.7 billion. DIB said the quality of planning and alignment of delivery capabilities helped it close the integration project in 283 days, well ahead of the projected deadline of one year. The merger forms the U.A.E.’s fourth biggest financial institution and the eighth largest bank in the GCC in terms of assets.
