Mergers and acquisitions (M&A) deal making across Sub-Saharan Africa (SSA), including South Africa, plummeted 53% to reach $21.3 billion in 2011, according to Reuters data.
The drop was significantly higher than the overall emerging markets region which saw a 13.6% year-on-year decline to $667.4 billion. On the other hand, global M&A showed slight growth, rising 7% over the year, to $2.6 trillion. The global growth figures were dragged down by a slowdown in activity in the second half of the year, in which the year-on-year M&A closures plummeted 24%.
Africa’s M&A figures include Anglo American’s $5.1 billion acquisition of a 40% stake in diamond giant De Beers, from E Oppenheimer & Son. The deal was the regions largest M&A transaction and raised Anglo American’s interest in Luxembourg-based De Beers from 45% to 85%.
M&A activity was supported by $4.1 billion worth of equity issuance from Africa-based corporate. The issuance was however 46% lower than the aggregate issued by the group in 2010. Equity issuance in SSA was led by the financial sector, which drew 21% of the equity transactions.
The financial sector was lifted by a $621.1 million convertible bond offering from South Africa-based Steinhoff Finance Holding. The deal solidified South Africa’s leading position as the top equity issuer, with the country making up 71% of equity transactions. Mauritius was the second largest equity issuer with 13%, while Nigeria closed 5%, making it third in line.
South Africa was the most targeted M&A country, closing $12.2 billion worth of deals, 57% of the overall activity in SSA. Uganda was second with $3.1 billion, 14% of overall activity.
Most of the equity deals across Africa were placed by Deutsche Bank , followed by BNP Paribas and Citi.