M&A activity in Africa on the rise


According to the 2013 Mergermarket Deal Drivers Africa review, it reported that a total of 115 deals with 26.6 billion dollars were taking place in the first three quarters across Africa.

“It’s certainly looking positive for the African region. Eighty per cent of the respondents surveyed in this report think that Mergers and Acquisitions will (M&A) increase over the next 12 months,” Mergermarket financial journalist Vinjeru Mkandawire told CNBC Africa.

“There’s certainly a lot of interest from multinationals looking to expand their operations in the region, and we’re seeing the rise of domestic and local players looking to grow regionally through M&A as well.”


Mergers and acquisition areas of interest include energy, mining and the utilities sector.

These specific sectors are however known to be particularly volatile. The energy sector in particular is not stable in a number of African countries, and this could be a deterrent for more M&A activity on the continent.

“According to our data, these seem to be stumbling blocks at the moment for investors but this is set to continue on in 2014. The continent is becoming a lot more diversified. We’re seeing the rise in some of the consumer sectors as well as TMT. The largest deal in the region this year was from the Technology, Media and Telecoms sector and we’ve seen quite a few private equity consumer deals as well.”

Technology, Media and Telecoms (TMT) and the developments in technology have not always been Africa’s stronghold, but investors are looking at the more untapped sectors in the region.

“Especially with TMT, you’re looking at larger inbound deals, for instance with the Maroc Telecom deal [where you have] middle eastern investors as well as investors in western Europe,” Mkandawire explained.

“Even within the mining, energy and utility sector, we’re still seeing a bit of activity over there particularly from some of the larger Asian economies such as China and India.”

While mergers and acquisitions are positive for the continent, Africans still to protect their resources and skills, as well as channel them towards the development of the continent.

“Within the energy, mining and utility sector, we will see a lot of increased partnerships between local firms and multinational players. We are seeing local firms increasing their share of activity and cross-border inbound activity is actually being dominated by some of the African firms,” said Mkandawire.

“We’re seeing corporates with a lot of cash to spend in the region and this will continue to drive partnerships between local and international firms.”