Johannesburg - South Africa’s overseas acquisitions accounted for 82% of sub-Saharan African outbound mergers and acquisitions (M&A) activity in the first half of 2016, according to estimates from Thomson Reuters/Freeman Consulting.
Acquisitions from Mauritian and Nigerian companies accounted for 12% and 5% respectively.
Steinhoff Finance Holding raised $1.2bn through a convertible issuance in April, the largest ECM offering in the region so far this year.
Sub-Saharan African (SSA) debt issuance raised a total of $6.9bn in proceeds for first half of 2016, a 10% decline compared to the same period last year.
Ivory Coast was the most active issuer nation with $4.1bn in bond proceeds, which accounted for 59% of market activity, followed by South Africa with 31% market share worth $2.1bn in proceeds. The South African government offered the largest bond issuance for the region this year with its $1.2bn 4.875% 10-year US-dollar Global bonds offering due on April 2026.
Bank of America Merrill Lynch took the top spot in the sub-Saharan African bond ranking for the first half of 2016 with $1bn related proceeds, capturing 15% of the market share.
The value of announced M&A transactions with any sub-Saharan African involvement reached $12.8bn for the first half of 2016, a 27% decline in deal value compared to the first half of 2015. Outbound activity increased 44% compared to the first half of 2015 and reached $4.1bn in deal value.
Sub-Saharan African investment banking fees reached $173.9m in the first half of 2016 - a 22% decline compared to the value recorded during the same period of last year, according to estimates from Thomson Reuters/Freeman Consulting.
Fees from completed M&A transactions totalled $54.8m, a 43% decrease from the comparative period last year and the lowest first half period since 2014. Fees from debt capital markets underwriting declined 66% year-on-year and reached $12.3m.
Syndicated lending fees increased 49% from over a year ago to $53.6m. Equity capital markets underwriting fees dropped 5% to $53.3m, and accounted for 31% of the overall sub-Saharan African investment banking fee pool.
Sumitomo Mitsui Financial Group earned the most investment banking fees in sub-Saharan Africa for the first half of 2016, with a total of $22.1m and captured a 12.7% share of the total fee pool. Morgan Stanley topped the completed M&A and ECM fee rankings during first half of 2016, capturing 21.6% of the M&A fee share and 16.3% of the ECM fee share. JP Morgan holds first place for DCM underwriting fee rankings with a 14.8% share. Sumitomo Mitsui Financial Group ranked first place for syndicated loans fees and captured 41.1% of the loans fee share.
Mergers and acquisitions
Inbound M&A reached $5.4bn, up 49% from over a year ago. Domestic and inter-sub-Saharan African M&A totalled $2.4bn, down 63% from the comparative period last year.
The materials industry was the most active sector with $4bn worth of deals, and accounted for 31% of sub-Saharan African involvement M&A. The largest deal with sub-Saharan African involvement during the first half of 2016 was China Molybdenum’s pending acquisition of the entire share capital of Freeport-McMoRan DRC Holdings for $2.77bn.
Citi topped the first half 2016 Any Sub-Saharan African Involvement Announced M&A Financial Adviser League Table with $4.2bn in related deals and captured 32.7% market share.
Equity capital markets
Sub-Saharan African equity and equity-related issuance totalled $ 4bn during the first half of 2016, an 18% increase in value from the first half of 2015. This is the highest first half period for the region’s ECM activity since 2007.
Two initial public offerings raised $44.7m and accounted for 1% of the ECM activity in the region, while follow-on offerings and convertibles accounted for 55% and 43% market share, respectively. Morgan Stanley took the lead during the first half 2016 sub-Saharan African ECM ranking with a 16% market share.