ALERT | DealMakers AFRICA is pleased to announce the launch of the AFRICA Oval Table advisory board. More info will be released at the upcoming awards on 14 March 2023.
DealMakers AFRICA 2019 Annual
From the editor's desk
Talk to anyone in the M&A industry across the Continent and you will, in most cases, get a similar reply – deal activity is buoyant but challenging; it’s the close that drags but the interest and the will is there. Challenges in regulatory landscape, earnings, capital, and equity markets add to the difficulties. As one adviser put it, “one can get to the point where the deal is 99% done but still have a 50% chance of it closing”.
Turbulence, in the form of geopolitical risks associated with emerging markets, has always gone hand in hand with fast economic growth. But, as that growth potential dims, trade stutters and global supply chains are disrupted, many investors are asking what, if anything, will drive the asset class in future, raising questions over the role of emerging markets in a diversified portfolio. But there are many who continue to believe in the promise of Africa, and for these investors, their understanding of the Continent and its people is becoming increasingly vital – it is a mistake to paint the Continent with one brush. Africa is by no means a single country with one set of homogenous risk factors.
The top deals for 2019, by value, are listed on page 3. Of these, the largest was the US$3,9 billion acquisition by Total, from Occidental, of the Anadarko assets in Mozambique, followed by the merger of Cement Company of Northern Nigeria and Obu Cement Company to form BUA Cement. This deal was awarded Deal of the Year (West Africa). Not unsurprising is the fact that the majority of deals to make this list fall in the mining and energy space.
The total value of deals recorded by DealMakers AFRICA for 2019 (excluding South Africa and failed deals) was $15,54 billion, up on 2018’s $11,46 billion. If deals classified as foreign (see description page 3) are included, the total value is $115,2 billion (2018: $33 billion). The jump in the value of foreign deals reflects the acquisition by Saudi Aramco of a 70% stake in Saudi Basic Industries ($69,1 billion) and the acquisition by the London Stock Exchange of Refinitive ($27 billion).
Drilling down to a regional level, Southern Africa, and Mozambique in particular, led the tables with a total value of $5,14 billion from 104 deals. Namibia was the most active within the region, announcing 22 deals. On the deal value front, West Africa placed second – $4,2 billion from 125 deals – with Nigeria claiming over 50% of deal activity. It was, however, East Africa with 150 deals that saw the greatest activity, much of which was private equity investments. In fact c. 45% of deals recorded in this region were by private equity funds.
During 2020, DealMakers AFRICA hopes to expand to provide league tables – not only for East and West Africa, but also Southern Africa (ex. South Africa). This, of course, would not be possible without the co-operation of the advisory firms to the deals and transactions undertaken. Interaction with these firms ensures that the information carried in the magazine, and on the digital database, is accurate. On this front, my thanks, once again, go to Vanessa Aitken, whose time and patience ensures that all transactions out in the public domain are captured in the DealMakers AFRICA database.
Marylou Greig