FROM THE EDITOR'S DESK
Analysis by DealMakers AFRICA of the M&A data for 2022 (excluding South Africa and failed deals) shows 687 local deals were announced across the continent, valued at US$17,53 billion – almost 15% lower than 2021’s deal value.
The slowdown in activity witnessed in the second half of the year was the result of macroeconomic factors such as the war in Ukraine, inflationary pressures and rising interest rates, and while these are likely to keep activity subdued for now, impacting on market sentiment, valuations and the cost of debt financing, it is important to note that the numbers are nevertheless back to their pre-COVID levels. The caveat here, however, is that this is thanks to private capital investors, rather than a return to ‘normal’ conditions.
Private Equity activity continues to grow and, in 2022, it represented two-thirds of the deals announced, valued at $4,67 billion (page 6). A closer look at the regional numbers speaks to this rise in private equity and impact investing. The three most active regions – East, West and North Africa account for 97% of these deals announced, and 83% of all M&A activity for the period.
In terms of total deals, West Africa continued to dominate, recording $3,29 billion by value, with Nigeria the centre of activity (135 deals). It was followed by East Africa, which recorded deal values in aggregate of $2,88 billion. Kenya was the most active of the East African countries, recording 123 deals of the 162 for the region (page 3).
The top 10 deals for 2022 by value are listed on page 4. Of these, the largest was the acquisition in March by MSC Mediterranean Shipping Company of the African transport and logistics business of Balloré S.A. for €5,7 billion ($6,32 billion). Given the global energy crises, brought to a head by the conflict between Russia and Ukraine, it is unsurprising that five of these deals are energy related.
DealMakers has been most fortunate to have had the support of the M&A industry over the past 23 years, and this has given us the confidence to undertake several new ventures. This year, we launch the DealMakers AFRICA Oval Table – based on a model similar to the one established 18 years ago in South Africa. Member firms will typically include financial and corporate advisers and legal advisers, but may be expanded to include representatives from private equity firms. The aim is to have participants representing the various countries within the regions. The representative body will ensure that the publication addresses the needs of the industry and, with input and guidance from the member firms, remains relevant and credible in an everchanging M&A space. My grateful thanks go to Absa and The Standard Bank Group for having the confidence to support us in this initiative.
This year, we return to Nairobi to celebrate the achievements of the M&A industry in 2022 with an in-person awards ceremony. DealMakers AFRICA hopes to host the awards in Lagos in 2024.