Sub-Saharan Africa in $23.4bn worth of M&A deals

Cape Town - The value of announced merger & acquisition (M&A) transactions with any Sub-Saharan African involvement reached $23.4bn during the first nine months of 2015, up 12% from the value registered during the same period in 2014.

Thomson Reuters' quarterly investment banking analysis for the Sub Saharan Africa region released on Sunday also showed that investment banking fees increased 4% to $305.9m during the review period, compared with the value recorded in the same period last year.

Fees from completed M&A transactions totalled $116.6m, a 49% increase from the comparative period last year, the highest first nine months period since 2011.

Fees from debt capital markets (DCM) underwriting also increased 20% year-on-year to reach $39.9m, while syndicated lending fees fell 22% compared with a year ago to $60.7m.

Equity capital markets (ECM) underwriting fees declined 16% to $88.8m, and accounted for 29% of the overall Sub-Saharan African investment banking fee pool.

Sneha Shah, Managing Director, Africa, Thomson Reuters, said in a statement Sub-Saharan African equity and equity-related issuance totalled $2.0bn during the third quarter of 2015, a 104% increase in value from the second quarter of the year.

"Despite the quarterly increase, Sub-Saharan African ECM declined 16% year-on-year to reach $5.4bn during the first nine months of 2015,” she noted.

According to Shah Sub-Saharan African debt issuance reached $2.7bn during the third quarter of 2015, 23% less than the value raised during the previous quarter and the lowest quarterly total since the first quarter of 2014.

Rand Merchant Bank, part of the First Rand Group [JSE:FSR], earned the most investment banking fees in Sub-Saharan Africa during the review period, with a total of $38.7m for a 12.6% share of the total fee pool.

Rand Merchant Bank also topped the completed M&A fee rankings during the first nine months of 2015 and also took the lead for ECM underwriting fees. Citi and Zenith Bank earned first places for DCM underwriting and syndicated loans fees, respectively.

As for mergers and acquisitions, outbound activity slowed down 34% compared to the first nine months of 2014 to reach $3.8bn.

South Africa’s overseas acquisitions accounted for 64% of Sub-Saharan African outbound M&A activity, while acquisitions from Mauritius and Seychelles companies accounted for 27% and 6%, respectively.

Inbound M&A also saw a decline, down 6% to $5.6bn.

Domestic and inter- Sub-Saharan African M&A reached $8.3bn, up 39% year-on-year, the highest first nine months total since 2010.

The financials industry was the most active sector, accounting for 18.5% of Sub-Saharan African involvement M&A.