Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 6.1 Billion in Q1 2021

Refinitiv today released the investment banking analysis for the Sub-Saharan African for the first quarter of 2021. According to the report, an estimated US$99.3 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2021, down 39% from the same period in 2020 and the lowest first quarter total since 2014. 

While debt capital markets underwriting fees doubled to US$47.1 million, the highest first quarter total since our records began in 1980, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first quarter of 2020.  Equity fees declined 42% to US$21.8 million, while syndicated lending fees declined 74% to US$15.0 million. 

Advisory fees earned in the region from completed M&A transactions reached US$15.5 million, down 65% from last year to the lowest first quarter total since 2005. Seventy-two percent of all Sub-Saharan African fees were generated in South Africa during the first quarter of 2021, and 39% were earned from deals in the financial sector. B Riley Financial Inc. earned the most investment banking fees in the region during the first quarter of 2021, a total of US$19.8 million or a 20% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$6.1 billion during the first three months of 2021, almost level with the value recorded during the same period in 2020, and a five-year low.  The number of deals declined 14% over the same period to the lowest first quarter tally since 2014.

M&A involving a Sub-Saharan African target increased 73% year-on-year to US$4.3 billion during the first quarter of 2021.  Domestic deals increased 67% from last year to US$2.5 billion, while inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 83% to US$1.8 billion.  Meanwhile, Sub-Saharan African outbound M&A totalled US$721.4 million during the first quarter of 2021, down 66% year-on-year to the lowest first quarter level in six years.

The Zambian Government, through its mining investment arm ZCCM Investment Holdings, acquired the Mopani Copper Mines for US$1.5 billion in January.  The acquisition is the largest deal in the region to be announced so far during 2021.

With advisory work on deals worth a combined U$668.5 million, BofA Securities held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during Q1 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached just US$18.4 million during the first quarter of 2021, the lowest first quarter total since 1999.  Only Nigeria payments processing firm eTranzact raised new equity funds from its follow-on offering.  There were no initial public offerings. PAC Capital, Meristem Securities and Standard Bank Group share first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2021.

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$12.1 billion during the first quarter of 2021, up 36% from the value recorded during the same period in 2020 and the highest first quarter total since 2018.  The number of issues declined 6% over the same period.  With Ghana’s government’s Eurobond raising US$2.9 billion and The African Development Bank’s $2.5 billion 5-year Benchmark bond, March 2021 saw more proceeds raised from bond issuance in Sub-Saharan Africa than any other month since May 2018, a total of US$7.4 billion.  Government & Agency issuance accounted for 64% of proceeds raised during the first quarter of 2021. Standard Chartered took the top spot in the Sub-Saharan African bond book runner ranking during the first quarter of 2021, with US$1.4 billion of related proceeds, or an 11.5% market share.