DealMakers AFRICA Q1 2021
From the editor's desk
It is the nature of the beast that mergers and acquisitions occur under many circumstances and, as such, the pause in M&A activity in the first few months of 2020 slowly abated across the continent. However, the impact of the lockdowns cannot be understated – the effects are clearly seen in the Q1 year-on-year regional analysis by DealMakers AFRICA. The total value of deals (excluding South Africa) captured for the period was US$3,57 billion (down 20% on Q1 2020) off 114 transactions. The region most adversely affected was East Africa, and Kenya in particular. The value of deals reported in Kenya declined 56% to US$24,4 million, while the number of transactions slid 18%. Of the 18 deals recorded in Q1 (pg 3), 78% of these were of a private equity nature. The continued growth and importance of private equity in this space across Africa continues.
North and West Africa were the most active regions with total deal values reported at US$2,19 billion and US$942,54 million respectively. To this point, North Africa and, more specifically, Egypt dominated the table of largest deals by value for Q1 (pg 4) taking four of the five top spots. The largest deal by value at US$800 million was, however, the acquisition by African strategic investor Heirs Holdings, in partnership with affiliated Transnational Corporation of Nigeria, of a 45% participating interest in Oil Mining Lease 17 in the Eastern Niger Delta and related assets from joint venture partners Shell, Total and ENI. The transaction is one of the largest oil and gas financings in Africa in more than a decade, with a financing component of US$1,1 billion. This positive sentiment by investors in Nigeria is vital, given that the World Bank reported in December that the economic impact of the coronavirus pandemic (together with the associated lockdown) will send personal incomes in Nigeria, Africa’s largest economy, back four decades.
This issue carries a number of interesting articles, including a snapshot of recent developments in competition law across Africa and important regulatory developments to note in Ghana and Rwanda. The increased need for patient capital speaks to the role of private equity on the continent; the Africa Funds Benchmark Survey (pg 8) looks at 12 Africa-focused PE funds focusing on key terms relating to fund governance, term, domicile and structure.
DealMakers Online, the database established in 2000, provides a wealth of information on M&A and capital market activity on the continent. In this issue (pg 6) we launch a new section, ‘AFRICA in Numbers’ which highlights trends that we hope readers will find both interesting and useful.