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The value of announced merger and acquisition (M&A) transactions with any sub-Saharan African involvement reached $66.7-billion in 2015, swelling by a hefty 73% on that registered in 2014, estimates from Thomson Reuters and Freeman Consulting have shown.
Sub-Saharan African investment banking fees, meanwhile, increased 24% year-on-year to reach $476.4-million in 2015, while fees from completed M&A transactions totalled $174.5-million – a 96% increase from the prior year and the highest yearly value since 2011.
“Sub-Saharan African equity and equity-related issuance totalled $3.9-billion in the fourth quarter of 2015 – a 93% sequential increase in value from the third quarter of 2015.
“Sub-Saharan African debt issuance raised a total of $15.5-billion in proceeds for 2015 – a 22% decline compared to 2014 – and the lowest yearly period since 2012,” added Thomson Reuters MD Sneha Shah.
Investment banking analysis by the parties further showed that investment banking fees from debt capital markets (DCM) underwriting also increased 41% year-on-year to reach $63-million.
Syndicated lending fees fell 21% from a year ago to $108.1-million, while equity capital markets (ECM) underwriting fees grew 14% to $130.8-million, accounting for 27% of the overall sub-Saharan African investment banking fee pool.
Rand Merchant Bank (RMB) earned the most investment banking fees in sub-Saharan Africa for 2015, a total of $48.5-million for a 10.2% share of the total fee pool.
RMB also topped the completed M&A fee rankings in 2015, while Java Capital took the lead for ECM underwriting, with 14.4% share of the ECM fee pool.
Deutsche Bank took first place for DCM underwriting, with 13.2% share of the total DCM fees, while Standard Chartered ranked first for syndicated loans fees, capturing 11.1% of the loan fees share.
Outbound activity on M&A deals increased 13% compared with 2014 and reached $6.7-billion in deal value over the 12 months, with South Africa’s overseas acquisitions accounting for 74% of sub-Saharan African outbound M&A activity.
Acquisitions from Mauritius and Seychelles companies accounted for 19% and 4%, respectively.
Inbound M&A grew by 283% year-on-year to $41.1-billion, the highest yearly period in any given year.
Domestic and inter-sub-Saharan African M&A reached $11.9-billion, down 32% from 2014, while the consumer products and services industry was the most active sector, with $24-billion worth of deals, accounting for 36% of sub-Saharan African involvement in M&A.
The largest deal with sub-Saharan African involvement in 2015 was the $22.6-billion reverse takeover transaction of integrated retailer Steinhoff International, facilitated by an offer from Genesis International.
In respect to ECM, sub-Saharan African ECM activity was up 37% year-on-year to reach $9.3-billion in 2015.
“This is the highest yearly period for the region’s ECM activity since 2007,” Thomson Reuters said in a statement.
Ten initial public offerings raised $544.5-million and accounted for 6% of the ECM activity in the region, while follow-on offerings and convertibles accounted for 81% and 13% market share, respectively.
Media group Naspers raised $2.5-billion from a follow-on offering in December.
In terms of DCM, South Africa was the most active issuer nation, with $5.5-billion in bond proceeds, which accounted for 35% of market activity, followed by Côte d'Ivoire, with a 28% market share worth $4.3-billion in proceeds.
Angola offered the largest bond issuance for the region, with its $1.5-billion sovereign debt in the form of Eurobonds.
Deutsche Bank took the top spot in the sub-Saharan African bond ranking for 2015 with a 19% share of the market.