GCC M&A Volumes to Reach $25bn in 2010

GCC's Leading Investment Banks Predict a Solid Bounce-Back for Regional M&A in H2 2010 With Bulls Suggesting Volumes Could Reach US$100bn in 2011

DUBAI, UAE, May 4, 2010 - Gulf M&A activity shows its first signs of life after two years marked by
cost cutting and balance sheet repair. The first GCC M&A Barometer
interviewed 27 international and regional investment banks. The survey was
conducted by Zawya, the online business provider and M:Communications, the
international financial communications agency.

Over 80% of investment banks expect the downward trend since
2007 to reverse in 2010, with total M&A value to reach $25bn. A significant
proportion of the participants are bullish on their outlook for 2011. Some
expect GCC M&A volumes to hit $100bn for 2011.

Historically, GCC M&A has constituted up to 10% of global M&A
activity. This year it has reached 4%, compared to Europe's 15% share.
However, led by the $10.7bn deal between India's Bharti Airtel and Kuwait's
Zain for Zain's Africa services, the M&A sector now has an air of cautious
optimism as key corporates' first quarter earnings show a return to double
digit growth. Chief executives may now seek growth through acquisition
strategies.

The GCC M&A Barometer's findings point away from distressed
sectors such as real estate and focus on industries such as healthcare,
financial services, energy and basic materials. Geographically, the majority
of M&A are expected to take place within the GCC area, with Saudi Arabia
leading the UAE and Qatar. Eighty-five percent of bankers expect mid-market
transactions to dominate the M&A market in 2010.

The GCC M&A Barometer also confirms a number of barriers to
increased M&A activity in the region: a continuing disconnect between
corporates' own growth expectations and those of the market; "chief
executive's egos"; and a lack of liquidity - most deals are expected to be
financed through a combination of debt and equity.

Commenting on the survey, Jean Marc Paufique, Head of Zawya's
Professional Investment Division, said, "It does appear that the corner has
turned with a large majority of our panel of leading bankers forecasting an
increase in M&A activity for 2010 with further acceleration in 2011."

Nicholas Lunt, Gulf Managing Director of M:Communications,
added, "There is still a long way to go before we return to the heady days of
the mid-decade, but the worst seems to be over in this region."

Report from www.zawya.com/gccbarometer/

    Samantha Bartel Al Khalaf
    E-mail: bartel@mcomgroup.com
    Tel: +971-4-3259675

Contact: Samantha Bartel Al Khalaf, E-mail: bartel at mcomgroup.com, Tel: +971-4-3259675