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Merger and Acquisition

Pharmaceutical Industry M&A Activity Grew by 17% in H1 2020 amid 56% Drop in Deal Value

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Pharmaceutical Industry M&A Activity Rose by 17% in the First Half of 2020

According to the research data analyzed and published by ComprarAcciones, merger and acquisition (M&A) deal activity in the pharmaceutical sector rose by 17% in H1 2020, disregarding the economic toll of the global pandemic.

It saw a total of 41 deals during the period, but the Q2 2020 deal value total of $3.3 billion was the lowest quarterly total since Q1 2018.

According to PwC, the pharma subsector posted a drop of 56% in deal value from H2 2019 to H1 2020. For the PLS sector as a whole (pharma, biotech and medical devices), the decline in deal value was a massive 87.2% during the same period.

Pharma and Life Sciences (PLS) M&A Total Deal Value Sank from $272.9B to $35B YoY

The total deal value for the pharmaceutical subsector in H1 2019 was $100.1 billion. In contrast, its total deal value in H1 2020 was valued at $7.7 billion.

The PLS sector had a total of 99 deals valued at $35 billion in H1 2020. In H2 2019, the figures were higher, with 129 deals valued at $86.5 billion. H1 2019 was even bigger, with 119 deals valued at a remarkable $272.9 billion.

Meanwhile, for the healthcare industry as a whole, H2 2020 started off with 13 deals valued at $1 billion+ according to S&P Global.

On the other hand, based on a report from Global Data, the global M&A deal value started on a downtrend in Q1 2020. It went from $151.2 billion to $129.9 billion from February to March. Another study from S&P Global shows that the decline carried into Q2 2020, with a 35% drop in deal volume. Similarly, total transaction value dropped by 40%, the highest drop since 2015.

Comparing H1 2020 to H2 2019, the total deal volume sank by 32% year-over-year (YoY) from 10,155 deals to 6,938 according to Merger Market. Deal values sank by 53%, from $1.9 trillion to $901.6 billion during the same period.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Merger and Acquisition

Moody’s Acquires 100% Stake in GCR Ratings

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Global Credit Rating Company Limited (GCR) is pleased to announce that Moody’s Corporation (NYSE: MCO) has increased its stake in GCR to 100%, following a 51% acquisition in 2022.

GCR is a leading credit rating agency in Africa with a broad geographic footprint that includes South Africa, Nigeria, Senegal, Kenya, and Mauritius.

GCR’s 28-year proven track record and successful domestic operations across the African continent, together with Moody’s international expertise represents a unique opportunity to contribute to the development of capital markets and the wider economies across Africa. GCR expects this acquisition will further solidify its position as a leading provider of quality, objective and independent credit opinions in African markets.

Commenting on the acquisition, Marc Joffe, Chief Executive of GCR, said,

“The full acquisition of GCR by Moody’s is an important milestone that will enable us to build on our deep local market insights and over a quarter century of growth across the African continent. It will also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG (environmental, social and governance factors) capabilities”.

Following the acquisition, GCR will continue to use its own ratings methodologies, issue its own credit ratings and maintain a separate management team.

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Merger and Acquisition

Oando Secures 100% Stake in Nigerian Agip Oil Company, NUPRC Announces

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Oando PLC has completed the acquisition of 100% of the shares of Nigerian Agip Oil Company Limited (NAOC Ltd).

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) confirmed the completion of the deal on Wednesday.

NUPRC Chief Executive, Engineer Gbenga Komolafe, made the announcement at the ongoing Oil and Gas Energy Week in Abuja, a significant event sponsored by the Nigerian National Petroleum Company (NNPC) Limited and other industry stakeholders.

The acquisition marks a significant milestone for Oando, a leading indigenous energy solutions provider, solidifying its position in Nigeria’s oil and gas sector.

“This acquisition is a testament to Oando’s commitment to expanding its footprint in the upstream sector,” said Komolafe. “The divestment agreement with ENI, which includes the full acquisition of NAOC Ltd, has been successfully finalized, and we look forward to the signing ceremony in the coming days.”

The NAOC deal is part of a broader wave of acquisitions and divestments within Nigeria’s oil industry, reflecting a dynamic shift in the sector.

Alongside Oando’s acquisition, other major transactions include Equinor’s completed deal with Project Odinmin and the ongoing due diligence for Shell Petroleum Development Company of Nigeria Limited’s (SPDC) transaction with the Renaissance Consortium.

Seplat Energy Offshore Limited is also advancing its proposed takeover of ExxonMobil Nigeria’s offshore shallow water operations, pending ministerial consent.

Oando’s acquisition of NAOC significantly boosts its operational capacity, increasing its participating interests in key Oil Mining Leases (OMLs) from 20% to 40%.

This strategic move not only enhances Oando’s production capabilities but also positions the company to leverage new opportunities in Nigeria’s oil-rich regions.

The NUPRC has emphasized the importance of adhering to regulatory frameworks to ensure smooth transitions and protect national interests.

Komolafe highlighted that while divestments are the right of investors, they must be conducted within the rule of law and best practices to avoid the pitfalls experienced by other countries.

“Countries like Brazil, Canada, and the UK have faced challenges with divestments that were not well-managed,” Komolafe noted. “We aim to avoid similar issues by ensuring that divestments in Nigeria are carried out with thorough due diligence, safeguarding financial capacity, technical capability, and environmental responsibilities.”

Oando’s acquisition aligns with Nigeria’s broader energy strategy, which includes diversifying its energy portfolio and attracting foreign investment.

The country is also focusing on becoming a hub for green hydrogen production, leveraging its abundant solar radiation to support Europe’s energy needs.

As Oando takes the helm of NAOC, the company is expected to drive initiatives that enhance oil production and contribute to sustainable energy solutions.

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Merger and Acquisition

Exxon Mobil’s Sale to Seplat Progresses After NNPC Drops Legal Challenge

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The Nigerian National Petroleum Corporation (NNPC) has withdrawn its legal challenge against Exxon Mobil Corp.’s sale of its oil and gas assets to Seplat Energy Plc.

This decision eliminates a major obstacle that had stalled the completion of the $1.3 billion deal.

The NNPC submitted an application to the high court in Abuja to discontinue the case, as confirmed by its legal firm, Afe Babalola, in an email on Thursday.

This move follows an agreement reached last month between NNPC and Exxon Mobil to finalize the transaction under undisclosed terms.

However, court documents reviewed by Bloomberg reveal that NNPC retains the right to resume its legal challenge if the settlement terms are not honored.

The sale, initially signed in February 2022, still requires approvals from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has set an August deadline, and from Nigerian President Bola Tinubu.

The NNPC’s withdrawal significantly advances the deal but does not mark its final hurdle.

The addition of Exxon Mobil’s blocks will significantly enhance Seplat’s portfolio, almost quadrupling its output to over 130,000 barrels per day.

This acquisition is set to bolster Seplat’s status as one of the leading suppliers of domestic gas to Nigerian power plants, fortifying its influence in the region.

In a parallel development, Shell Plc’s divestment of its Nigerian onshore oil business to a consortium of local firms, valued at over $1.3 billion, also awaits regulatory approval after being announced in January.

Both deals highlight the ongoing restructuring and consolidation within Nigeria’s oil and gas industry, aimed at increasing efficiency and local participation.

As Nigeria navigates these substantial industry shifts, the successful completion of the Exxon Mobil-Seplat deal will be a critical indicator of the nation’s ability to manage large-scale energy transactions.

It will also set a precedent for future agreements and regulatory processes in the country’s vital oil and gas sector.

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