Is Nigeria’s M&A space under pressure?

by Trust Matsilele 0

Nigeria’s mergers and acquisition (M&A) sector hit a brick wall this year as a result of uncertainty around its elections and in the face of an economic slowdown; this is a shared viewed from some analysts.

However, one of the industry experts, Kayode Fadahunsi of Capital Markets and M&A at United Capital says this analysis seems to only factor M&A deals conducted within the listed company space.

“We have had 31 mergers and acquisitions this year; interestingly about six of them are from companies listed on the Nigerian Stock Exchange,” Fadahunsi told CNBC Africa.

According to EY, between 2008 and 2014, 105 M&A deals were completed in Nigeria. The firm adds that, more than two-thirds (70) of these deals were completed between 2011 and 2014.

“We have had pretty good transactions in the mergers and acquisitions space,” added Fadahunsi.

“There is a mismatch in the way analysts look at the sector; they look at mergers and acquisitions done by listed companies.”

Fadahunsi said the M&A sector saw lucrative transactions such as Kellogg’s deal worth 450 million US dollars for a 50 per cent stake in Nigeria-based Multipro.

Analysts believe that Nigeria’s large population with increasing disposable income will be one of the contributing factors in raising momentum in the sector.

The EY’s Capital Insights report notes that Nigeria’s fortunes are underpinned by the population’s growing affluence.