SA leads region in offshore deals

JOHANNESBURG – South African companies poured $5.1 billion into offshore deals in 2017, accounting for 65.6% of sub-Saharan Africa’s outbound mergers and acquisitions (M&A) activity, that is according to Thomson Reuters data.

This was more than double that of its closest competitors, Mauritius. Companies headquartered in Mauritius accounted for 31.7% of the region’s M&A activity, reported Thomson Reuters in an investment banking analysis released on Monday.

South African companies have made a conscious decision to seek opportunities offshore as a stagnant economy and policy uncertainty hurt local growth prospects.

Some of the most prominent deals in 2017 include First Rand’s R19.4 billion acquisition of UK bank Aldemore; purchase of a 35% stake in Kenya’s Safaricon for R36.7 billion by Vodacom and Sibanye Gold buying Stillwater Mining Company for R29 billion.

Outbound M&A activity in sub-Saharan Africa declined 44% to $7.8 billion, despite this heightened activity.  Inbound M&A, meanwhile reached a three-year low of $14,4 billion, with the US, the UK and Switzerland leading inbound investments.

However, Sub-Saharan Africa debt issuance raised $28.5 billion, which is up 27% from the same period in 2016. Ivory is reported to be the most active issuer nation, accounting to 36% of market activity, followed by South Africa and Nigeria.

The Barclays Africa sell down, Steinhoff Africa Retail’s initial public offering and capital by Sibanye Gold and Vodacom drove the equity and equity-related issuance which reached $9.6 billion, up to 11% from 2016.

 Photo Credit – Escape From America

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