Kenya an M&A trailblazer in East Africa

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“It’s driven by the growth rates that we’re seeing in company earnings here in Kenya, certainly relative to the developed world and even across Africa. The growth rates of companies here in quite a number of industries are so attractive that international companies can pick up earnings by coming and making acquisitions here,” Edwin Burbidge, CEO of Burbidge Capital, told CNBC Africa.

Burbidge added that last year, East Africa attracted roughly 34 deals across the region, majority of which were done in the financial services, natural resources and agriculture sectors.

 “The average size is probably somewhere between five and 20 million dollars, so by international standards it’s not huge. The exceptions to that are in the oil and gas industry in particular, where companies that have achieved a large level of resources are acquired for big numbers,” Burbidge explained.

(READ MORE: M&A activity in Africa on the increase)

The biggest of last year’s deals in East Africa amounted to 4.2 billion dollars when China National Petroleum Corporation acquired a 28.57 per cent stake in Eni East Africa Spa from Eni Spa.

Other notable acquisitions include South Africa’s Dimension Data and its acquisition of telecommunications company AccessKenya for 35 million dollars, whose acquisition process begun last year and has recently been finalised.

(WATCH VIDEO: Costs involved in mergers and acquisitions)

According to Mergermarket’s Deal drivers Africa 2013 report, energy, mining and utilities was expected to see the greatest increase in international deal making activity between 2013 and 2014.

This was followed by the consumer sector, and technology, media and telecoms sectors in third place.

“A stable political environment is maybe the most important thing for international acquisitions. You have to give credit to the Kenyan political system that at the moment [has] a good level of stability, and a government that seems to be producing policies that are attractive enough for international companies to come here,” said Burbidge.