Home ECONOMY Mergers and Acquisitions Decrease Across Africa in H1; 2020

Mergers and Acquisitions Decrease Across Africa in H1; 2020

by biasharadigest

Mergers and acquisitions decrease across Africa in the first half of 2020 in terms of both volume and value. International law firm Baker McKenzie says that in the short term the economic uncertainty is likely to cause a reduction in foreign direct investment in Africa.

The firm, however, remains optimistic of recovery in the medium term attributable to Africa’s renewed partnerships with major global economies and recent policies on trade and investment. Shifting global trade patterns have seen the major players turn to Africa to find new avenues for trade and investment.  Examples include the recent Economic Partnership Agreements signed with the UK to govern bilateral trade with certain African countries after Brexit and China’s continued interest in Africa, especially in terms of the Belt and Road Initiative.

The current report focuses on South Africa, Nigeria, Kenya, and the Sub Saharan Africa region.


Kenya announced a 50% drop in volume and a 51% decline in value in M&A deals in H1 2020 compared to H1 2019. There were 15 M&A deals in H1 2020 worth $129 million. Twelve of the 15 deals in the first half of 2020 were cross border transactions. For inbound cross border deals, the focus was on media and entertainment, with three deals, as well as the financials, retail, and materials sectors, recording two deals each.

There was one outbound transaction, which had the highest deal value of all cross-border deals. Bujagali Energy Ltd’s $39 million sales to Jubilee Holdings was the highest outbound cross-border transaction of the period, while commercial International Bank Egypt’s acquisition of Mayfair Bank for $35 million was the top inbound cross border deal.

South Africa

The value of M&A transactions in South Africa dropped 60% to $3.3 billion in the first half of 2020, down from $8.2 billion for the same period last year (H1 2019). This is according to Baker McKenzie’s analysis of Refinitiv data, which lists completed and pending deals. The volume of M&A deals in South Africa fell by 18% year-on-year, with 132 transactions recorded in H1 2020, down from 160 in H1 2019.

Domestic M&A activity in South Africa dropped 18% to 64 transactions, down from 78 in H1 2019. Domestic deals were valued at $1.7 billion in H1 2020, down 71% year-on-year. Cross border transactions reflected the same downwards trend, with M&A volume down 17% to 68 deals, and deals valued at $1.5 billion in the first half of 2020, down 32% from the same period last year. 

Barloworld’s acquisition of the equity assets of both Wagner Asia Group and SGMS LLC by its Mongolian subsidiary, for $212 million each, were the biggest cross-border transactions in South Africa in the first half of this year.


Going against the downward trend, dealmaking in Nigeria increased by 44% with 26 deals in H1 2020 compared to 18 in H1 2019. The total deal value went down 46% to $204 million in the first half of 2020, from $375 million in H1 2019 (but this is likely because most of the deals listed for H1 2020 have no disclosed deal value.) The number of cross border deals increased by 18% in comparison to the first half of 2019, while domestic deals were also up by 86% year-on-year.

Half of the total M&A deals in Nigeria were cross border transactions, totalling $40 million. Deals were evenly distributed among industries, with financials and high technology recording two inbound deals each and the industrials sector recording two outbound M&A deals.

The $21 million acquisition of Interporto di Venezia SpA in March 2020 by an Orlean Invest Holding subsidiary for $21 million, was the biggest cross border deal in Nigeria in the first half of 2020.

The report notes that policy and economic uncertainty, including lack of access to foreign exchange, stalled dealmaking in Nigeria in recent years. The Nigerian economy was already impacted quite severely by the disruption in oil markets in recent years, but COVID-19 has added extensive damage to the economy, and this will undoubtedly impact negatively on M&A numbers going forward

Sub-Saharan Africa

In the Sub-Saharan Africa (SSA) region, M&A volume decreased 24% to 254 deals, compared to 338 deals for the same period last year. The total value of M&A deals was down 56% to $6.8 billion in the first half of 2020, compared to $15.3 billion in H1 2019. The majority of deals in the first half of this year were cross border, with 160 transactions totaling $4.8 billion.

There were 89 inbound deals in SSA during this period, valued at $1.1 billion. The primary target was the materials industry with 24 deals, totaling USD 305 million. The United Kingdom and the United States were the primary investors with 17 and 15 deals, worth $161 million and $658 million, respectively. The region also reported 49 outbound transactions worth $3.6 billion. The industrials sector was the most targeted with nine deals, while the materials and telecommunications sectors had the biggest deal values, totaling $1 billion each.


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