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African M&A excites investors

LONDON, UK – The 2013 edition of Mergermarket’s Deal Drivers Africa reports a total of 115 deals worth US$26.6bn taking place in the first three quarters of 2013 across Africa. Robust M&A activity on the continent has been supported by increasing economic diversification among a number of countries, creating untapped investment opportunities in areas such as financial services, TMT and business services.
Seven of the ten biggest deals of 2013 have been in the energy, mining & utilities sector. The largest of these transactions was China National Petroleum Corporation’s acquisition of a 28.57% stake in Eni East Africa Spa from Eni Spa, with a value of US$4.2bn. “Chinese interest in the African energy and resources sector has grown apace in recent years, thanks to China’s domestic energy consumption,” noted Kristina Thompson, Editorial Research Analyst at Remark.

The majority of M&A activity remains driven by African investors, rather than inbound M&A to the region. Since 2006, African acquirers have generally accounted for 50 to 60% of the total deal volume in each year.
Private equity activity has been slightly muted compared to 2012. In the first three quarters of 2013 there were 16 private equity-related transactions worth US$1.2bn, compared to US$1.8bn in 2012.
There has 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 reach 56% by 2013.
Deal Drivers Africa is published by Mergermarket in collaboration with ENSafrica, Nedbank Capital and Ecobank. Based on interviews with 100 M&A practitioners operating in Africa, this report provides invaluable insight into the African M&A market from those who know it best.

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