MERGERS & ACQUISITIONS
Burgeoning M&A in the Islamic Finance Sector Taking a viewpoint from an Islamic Finance position, Mujtaba Khalid Head of the Islamic Finance Centre at the Bahrain Institute of Banking and Finance (BIBF) points to the expected high growth in this sector and describes why we could see increased M&A activity in the regions Islamic Banks, noting that increased Sukuk and bond issuing could be a forerunner to an uptick merger activity
M
&A deal value for the Middle East in FY 2021 grew nearly 60% over the previous year. Can growth in the regional M&A market be sustained?
Mujtaba Khalid, Head of the Islamic Finance Centre at the Bahrain Institute of Banking and Finance (BIBF)
52
Banking and Finance news in the MEA market
A recent study by law firm Baker McKenzie stated that the Middle East recorded strong M&A activity with 665 deals in FY 2021, from 439 witnessed in 2020. As the COVID restrictions start to ease in many jurisdictions within the Middle East, a lot of cross border travel as well as economic activity will resume, further catalyzing M&A activities. Although economic activity has picked up, there might still be a lag in dealing with the impact of COVID related difficulties. From an operational perspective, there are certain challenges faced especially by Islamic banks in the region that could act as a catalyst for increased merger activity; as a response to the COVID situation, all regional regulators responded to lessen the impact on the public. There were many stimulus packages announced,