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The value of announced merger and acquisition (M&A) transactions involving sub-Saharan African targets reached $5.7-billion in the first quarter of the year – almost double the value recorded during the same period last year but 65% lower than in the previous quarter – recent estimates from analyst firms Thomson Reuters and Freeman Consulting has suggested.
The most targeted nation by value was South Africa, accounting for 48% of activity, followed by Nigeria, at 33%. South Africa was also the most active buyer in the region, while Canada was the most active foreign buyer, Thomson Reuters Africa MD Sneha Shah outlined.
Elaborating on noteworthy M&A activity during the quarter, Shah noted that Eroton Exploration & Production acquired a 45% stake in the Oil Mining Lease 18 of the Nigerian State-owned Nigerian National Petroleum Corp for $1.1-billion in March.
The deal was the largest in the region during the three months.
Boosted by this deal, the energy and power industry was the most active sector during the first quarter of the year, accounting for 29% of M&A activity.
Equity capital markets were also lively during the first three months of the year, while follow-on offerings dominated the market, the largest being from South Africa’s Aspen Pharmacare Holdings in March.
According to Thompson Reuters, some 69% of deals, in terms of proceeds raised, involved a South African issuer.
In addition, the healthcare, financial and energy and power sectors were the most active for equity issuance in the region over the period, while debt capital markets in sub-Saharan Africa recorded the highest first quarter total in the region since 2011.
South African energy utility Eskom issued the largest bond in the region so far this year, having sold $1.2-billion in ten-year fixed-rate bonds in February.
“Equity and equity-linked issuance in sub-Saharan Africa totalled $2.5-billion in the first quarter of the year, an increase of 141% from the value recorded during the same period last year and the highest first-quarter total since 2007.
“Moreover, sub-Saharan African debt issuance reached $4.1-billion in the first quarter of this year –70% more than the value recorded during the same period last year and the highest first-quarter total in the region since 2011,” added Shah.