Strategic investors boost M&A in Egypt

Financial Times: This is Africa
Egypt’s political and economic crisis has led to the lowest number of M&A deals in nearly a decade, according to Mergermarket data. However, these disruptions are unlikely to deter investors with long-term strategic interest in the region, suggest investment bankers in Egypt.
With nine transactions valued at $5.4bn so far this year, a handful of strategic buyers undeterred by political instability have contributed to the bulwark of M&A values in the country. Deal values in 2012 ($7.7bn), a year after the revolution which toppled President Mubarak, rose 304 percent from 2011 ($1.9bn), and are the highest since Egyptian M&A activity peaked in 2007 ($21bn).
Due to years of instability, however, Egypt’s M&A dealmaking environment has followed a downward spiral in activity with deal volumes decreasing an average of 17 percent every year since 2007.
Despite the current economic climate, Karim Awad, CEO of EFG Hermes Investment Bank believes that M&A activity in Egypt has not died completely, with risk appetite significantly higher among strategic players than financial investors. With a population of 80 million people, Egypt is well positioned for growth in the consumer industries or any sector influenced by local consumption, explained Awad.
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