BEIRUT: Total mergers and acquisitions in the MENA region posted a yearly increase of 4 percent in volume, according to Ernst & Young.

A total of 416 deals were reached in 2011, versus a total of 401 in 2010, according to a report carried by Bank Audi’s Lebanon Weekly Monitor.

On the other hand, the report showed that deal values fell by 28 percent from $44.1 billion in 2010 to $31.7 billion in 2011.

Ernst & Young’s figures indicate that a larger number of deals took place at smaller valuations, which signifies that asset values across the region have taken a tumble in light of lower regional economic growth, as well as lower projections for future growth.

The Ernst & Young study categorized deals as follows: domestic deals (MENA investors doing deals in the MENA region), outbound deals (MENA investors doing deals outside the MENA region) and inbound deals (non-MENA investors doing deals in the MENA region).

In terms of volume, domestic transactions outnumbered inbound and outbound deal activity, making up about 54 percent of deals announced in 2011.

In terms of value, however, outbound deal activity held the greatest value among total announced deals, comprising $16.3 billion, or 51 percent, in 2011.

By volume, outbound transactions came second after domestic deals in terms of dominance in M&A market activity, comprising 104 deals, or 25 percent of the total deal volume.

Inbound deals, comparatively, held the lowest volume and value among total announced deals, comprising 88 deals or 21 percent of deal volume and $5.6 billion or 18 percent of deal value in 2011.

A drop in inbound deals directly correlates with the decreasing levels of foreign direct investment in the region. This decrease is largely driven by uncertainty caused by regional turmoil.

However, the situation is expected to improve in 2012 as global investors are likely to return to seek emerging markets in the region.