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Value of announced M&A with African involvement reaches $18b in first half 2017 – Thomson Reuters

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The value of Mergers and Acquisitions (M&A) with sub-Sahara African involvement reached $18.1 billion in the first half of 2017, according to the quarterly investment banking analysis released by Thomson Reuters.

According to the analysis, domestic and inter-sub-Saharan African M&A totaled $3.7 billion, up 38 per cent year-on-year. South Africa’s overseas acquisitions accounted for 71.9 per cent of sub-Saharan African outbound M&A activity, while acquisitions by companies headquartered in the Mauritius and Seychelles accounted for 17.8 per cent and 10.3 per cent respectively.

Sneha Shah, Managing Director, Africa, Thomson Reuters, was quoted as saying: “The value of announced M&A transactions with any Sub-Saharan African involvement reached US$18.1 billion during the first half of 2017 – the highest first half since 2013. Inbound M&A reached a 4-year high of US$10 billion with the United States, the United Kingdom and China leading investments while Outbound M&A declined 39% to $1.8 billion during the first half of 2017.”

The analysis indicates that Exxon Mobil’s $2.8 billion acquisition of 25 percent stake of a Mozambique liquefied natural gas project is still the largest deal to be announced in the region during the first half of the year, followed by the Vodacom Group acquisition of Vodafone Kenya in a $2.5 billion stock swap transaction.

“Goldman Sachs topped the first half 2017 of any Sub-Saharan African Involvement Announced M&A Financial Advisor League Table with a 22.1 per cent share of the market,” it said.

In the analysis copied to ghanabusinessnews.com, Thomson Reuters estimates show that sub-Saharan African investment banking fees reached $244.7 million during the half of 2017, up 12 per cent from the value recorded during the first six months of 2016.

That analysis noted that fees from completed M&A transactions totalled $71.4 million, a one per cent increase year-on-year, while equity capital markets underwriting fees rose 32 per cent to a ten-year high of $71 million. 

It added, that syndicated lending fees declined, falling 60 per cent from this time last year to $33 million. 

“Fees from debt capital markets underwriting saw an increase from $13 million during the first half of 2016 to $69.2 million during the first half of 2017. Debt capital market underwriting fees accounted for 28 per cent of the overall sub-Saharan African investment banking fee pool, the highest first half share since 2003.  Both completed M&A and equity capital markets generated 29 per cent of the total fee pool, while syndicated lending fees accounted for 13 per cent,” it said.

It also indicated that Citi earned the most investment banking fees in sub-Saharan Africa during the first half of 2017, with a total of $30.8 million or a 12.6 per cent share of the total fee pool. Morgan Stanley topped the completed M&A and ECM fees ranking while Citi topped the DCM underwriting fee ranking with a 13.7 per cent share. China Construction bank ranked first for syndicated loans fees.

In equity capital markets, sub-Saharan African equity and equity-related issuance totaled $4.8 billion during the first half of 2017, 28 per cent more than the value recorded during the same period in 2016. Barclays Africa Group $2.9 billion follow on offering stands out as the biggest ECM deal so far this year, it said, adding that, follow On offerings accounted for 83 per cent of the ECM activity in the region by value, while IPOs and convertibles accounted for 5 per cent and 12 per cent, respectively. Morgan Stanley topped the sub-Saharan African ECM league table during the first half of 2017 with an 18.6 per cent share of the market.

“Sub-Saharan African debt issuance raised a total of US$15.3 billion in proceeds during the first half of 2017. This was more than double the value recorded during the same period in 2016 and by far the highest first half total since Thomson Reuters records began in the 1970s,” Shah added.

The study found that the Ivory Coast was the most active issuer nation with $6.8 billion in bond proceeds, which accounted for 44.7 per cent of market activity, followed by Nigeria and South Africa.

Standard Chartered took the top spot in the sub-Saharan African bond ranking for first half of 2017 with $2.2 billion of related proceeds, or a 14.7 per cent market share, it said.

By Emmanuel K. Dogbevi

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