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Sub-Saharan African mergers, acquisitions increase 12%

Jul 16 2015 22:15

Johanneburg - South African investment company Brait has logged the largest acquisition in Sub-Saharan Africa for the first half of 2015, as mergers and acquisitions (M&A) increase 12% year-on-year for the region.

Sneha Shah, Managing Director for Thomson Reuters Africa, said: “The value of announced M&A transactions with any Sub-Saharan African involvement reached $15.3bn during the first half of 2015, 12% more than the value registered during the same period in 2014.  

South Africa accounted for the most overseas acquisitions with 65% activity, while Mauritian and Nigerian companies accounted for 13% and 11%, respectively

"Outbound activity reached a four-year high, up 13% from the first six months of 2014 to reach US$3.3bn (Approx R41bn)." 

The largest deal with Sub-Saharan African involvement during the first half of 2015 was the US$1.2bn (Approx R14.2bn) offer from Brait Mauritius for a 90% interest in British retailer New Look.

Investment banking fees

Sub-Saharan African investment banking fees reached $154.7m during the half of 2015, 10% more than the value recorded during the first six months of last year.

Sub-Saharan African equity and equity-related issuance totalled $1bn during the second quarter of 2015, 60% less than the value recorded during the first quarter of the year. Sub-Saharan African debt issuance reached $3.2bn during the second quarter of 2015, 23% less than the value raised during the previous quarter and the lowest quarterly total since the first quarter of 2014.

Furthermore, fees from debt capital markets (DCM) underwriting more than doubled year-on-year to reach $30m, the best first half in the region since 2011. Syndicated lending fees also saw growth, up 63% to $35.9m.

Equity capital markets (ECM) underwriting fees declined 13% to $56.9m, accounting for 37% of the overall Sub-Saharan African investment banking fee pool, while fees from completed M&A transactions totalled $32m, marking a 19% decline from the first half of 2014.

Rand Merchant Bank earned the most investment banking fees in Sub-Saharan Africa during the first half of 2015, a total of US$20.5m for a 13% share of the total fee pool. 

Investec topped the completed M&A fee rankings during the first half of 2015. Rand Merchant Bank was first for ECM underwriting fees, while Citi and JP Morgan earned first places for DCM underwriting and syndicated loans fees, respectively.

ECM's and DCM's

Despite the quarterly decline, Sub-Saharan African equity capital markets increased 18% year-on-year to reach $3.5bn during the first half of 2015, marking the best first half by proceeds raised since 2010.

Four initial public offerings raised $172.8m and accounted for 5% of first half activity in the region, while follow-on offerings accounted for the remaining 95%.

GlaxoSmithKline raised $841m from a partial sale of Aspen Pharmacare shares in March, the largest equity offering in the region so far this year. Rand Merchant Bank took first place in the first half of 2015 Sub-Saharan African ECM ranking with a 22% market share.

In respect to debt capital markets in Sub-Saharan Africa, the first half bond issuance in the region decreased 3% from last year to $7.3bn during the first six months of 2015.

SA was the most active nation accounting for almost half (49%) of activity, followed by the Ivory Coast with 34%. Deutsche Bank took the top spot in the Sub-Saharan African bond ranking during the first half of 2015 with a 17% share of the market.



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