Out of Africa: How the M&A Market is Evolving South of the Sahara

Benchmark International has recently opened a new office in Cape Town, South Africa (see 3rd July blog post), headed up by Andre Bresler and Dustin Graham. This is an exciting development for Benchmark International, in a dynamic evolving market.

South Africa is a core strategic market for any global M&A team, as the country is the conduit for more than half of M&A activity across the African continent. In South Africa itself, the M&A market is expected to grow by some 66% over the next two years, making it one of the top 10 domestic markets predicted to witness the greatest M&A expansion worldwide.

Rises in local commodity prices, as well as more gradual economic and wider reforms, are set to help stimulate growth in the sector, especially among domestic investors. South Africa is becoming more and more integrated into the global economy, and it’s very much showing in the M&A market. Also, with the country’s in-bound foreign investment expected to increase significantly – so is the demand for specialist legal skills across borders.

M&A deals involving African markets were worth US$39bn in 2016 – an value increase of 49.1% compared with 2015. Top deals in the region in 2016 included Bidvest Group selling food service company Bid Corp to Bidvest shareholders (€5.7bn); Rockcastle Global Real Estate Co Ltd selling to New Europe Property Investments Plc (€3.5bn); and Coca-Cola Beverages’ re acquisition of a controlling interest in their African division from Anheuser-Busch InBev (€3.1bn).

Featuring strongly amid other African markets, Nigeria has a predicted M&A transaction growth rate of 62% over the next two years (the only other African market in the top ten countries worldwide aside from South Africa), having reported over $1.9bn of M&A deals in 2016.

For more information about M&A activities in southern Africa, contact our team at Benchmark International.

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