Tadawul Resumes its M&A Hyperactivity, following the Pandemic Pause

As many as 33 companies listed on the financial market announced over 50 mergers and  acquisitions deals, during the Year 2021, including 46 acquisitions and four mergers.

Value of 28 acquisitions was announced, at SR3.85 billion.

This was unfolded, in light of the recovery of merger and acquisition activities, especially after the repercussions of the pandemic crisis that dominated the world, including the Kingdom during the Year 2020 and the end of the Year 2019.

In addition to an affirmation of the companies’ efforts to benefit from the growth and economic prosperity witnessed by the Kingdom, which indicate the growing confidence of investors and deal executors in the national economy’s indicators.

That was as the positive aspects of the local economy have begun to bear fruits, following the ongoing reforms within the programs of Vision 2030.

2021 witnessed a state of clear diversity in the sectors, in which the deals were made, as they took place across the board, including food, health, education, media, petrochemicals, real estate, construction, building, cement, and finally insurance, which had the largest share, as 3 companies announced their intention to merge with another 3 in the sector, which can be attributed to the large number of companies against slight activities, as well as incurring heavy losses, with looming default.

Savola Food deal, which is affiliated with the Savola Group, came in terms of value, as it signed a binding share purchase agreement to acquire 100% of the UAE Bayara Holding Company Ltd., at a value of SR975 million, followed by a deal executed by Alujain Holding Company, where it signed an allocated share purchase agreement.

For a group of shareholders of the subsidiary company, the National Petrochemical Industries Company “NATPET” with a value of SR814.6 million, and values of the two deals at SR1.79 billion, representing 46.51% of the total value of the announced deals, while 4 of the acquisition deals announced by the companies were canceled.

Saudi Company for Agricultural Investment and Livestock Production “Salic” owned by the Public Investment Fund has secured acquisition of 35% of the Australian Minerva Foods Company.

There are the sale of the Saudi Industrial Services Company “Sisco” of a 21.2% minority stake, in the Red Sea Gateway Station Company, to the Public Investment Fund and Cosco Shipping Port Limited Company, at a value of SR556.5 million.

2020 has witnessed 27 acquisition and merger deals struck by listed companies, of which 5 were merger deals, including 3 deals for companies in the insurance sector, in addition to the most famous merger between Al-Ahly Commercial Bank  and Samba Financial Group (Saudi Al-Ahly Bank, after the merger) as well as Petrochem’s announcement that it had signed a memorandum of understanding for the merger, with the Saudi group.