Robust M&A activity on continent driven by Africans
Some 115 merger and acquisition (M&A) deals worth $26.6-billion took place across Africa in the first three quarters of this year, with the robust M&A activity supported by increased economic diversification by several countries, the creation of investment opportunities in areas such as financial services, technology, media and telecommunications, as well as the provision of business services, a report has found.
The 2013 edition of the Deal Drivers Africa report, jointly published by financial intelligence firm Mergermarket, ENSAfrica, Nedbank Capital and Ecobank, revealed on Wednesday that seven of the ten largest transactions of the year were in the energy, mining and utilities sectors.
The report, which was based on interviews with 100 M&A practitioners operating in Africa, found that the largest of these was China National Petroleum Corporation’s acquisition of a 28.57% stake in oil and gas explorer Eni East Africa from Eni for $4.2-billion.
The majority of M&A activity was driven by African acquirers rather than inbound M&A to the region, with African acquirers having generally accounted for between 50% and 60% of the total yearly deal volume since 2006.
In contrast, private equity activity was slightly muted in 2013 compared with 2012.
In the first three quarters of the year, 16 private equity-related transactions worth $1.2-billion were made, while, in the same period in 2012, 26 private equity-related transactions worth $1.8-billion were finalised.
Meanwhile, there had been a marked rise in the value of deals originating from the Asia-Pacific region, increasing from a 13% share in deal value in 2006 to 56% by 2013.
“Chinese interest in the African energy and resources sector has grown apace in recent years, thanks to China’s domestic energy consumption,” noted Remark editorial research analyst Kristina Thompson.
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