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Merger and Acquisition

Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 78.3 Billion During First Nine Months of 2021

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Refinitiv today released the Sub-Saharan African investment banking analysis for the first nine months of 2021. According to the report, an estimated US$387.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2021, a 15% increase from the same period in 2020. 

While debt capital markets underwriting fees increased 148% to US$117.8 million, the highest year-to-date period since our records began in 2000, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first nine months of 2020.  Equity fees declined 17% to US$50.7 million, while syndicated lending fees declined 4% to US$148.2 million. Advisory fees earned in the region from completed M&A transactions reached US$70.8 million, down 3% from last year to the lowest first nine-month total since 2013.  Fifty-eight percent of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2021, and 23% were earned from deals in the financial sector. Standard Chartered earned the most investment banking fees in the region during the first nine months of 2021, a total of US$33.1 million or an 8.5% share of the total fee pool.

MERGERS & ACQUISITIONS

Boosted by the US$44.1 billion Naspers/Prosus share swap in May, the value of announced M&A transactions with any Sub-Saharan African involvement reached US$78.3 billion during the first nine months of 2021, more than four-times the value recorded during the same period last year and the highest first nine-month total since our records began in 1980.  The number of deals increased 4% from last year to a three-year high of 584.

M&A involving a Sub-Saharan African target reached US$61.8 billion, again lifted by the share swap to an all-time record first nine-month total, while the number of deals increased 8% over last year.  Inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 86% to US$9.6 billion, while Sub-Saharan African outbound M&A more than doubled to US$11.5 billion. With advisory work on deals worth a combined U$52.1 billion, Morgan Stanley held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached US$971.2 million during the third quarter of 2021, the highest quarterly total in more than two years.  Despite the strong third quarter, total proceeds raised during the first nine months of 2021 was down 42% from last year at US$1.2 billion, the lowest first nine-month total since 2005.   Pepkor Holdings, Lighthouse Capital and retail pharmacy chain Dis-Chem Pharmacies were among those in the region raising new equity funds from follow-on offerings during the third quarter.  There have been no initial public offerings in the region so far during 2021. Investec and Goldman Sachs share first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2021. 

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$37.2 billion during the first nine months of 2021, up 149% from the value recorded during the same period in 2020 and the highest first nine-month total since our records began in 1980.  The number of issues increased 33% over the same period.  US$15.2 billion worth of the bond proceeds were raised during the third quarter alone, with both Prosus and the Federal Government of Nigeria raising US$4.0 billion.  Government & Agency issuance accounted for 55% of proceeds raised during the first nine months of 2021, while the financial sector accounted for 24%. Citi took the top spot in the Sub-Saharan African bond book runner ranking during the first nine months of 2021, with US$6.0 billion of related proceeds, or a 16% market share.

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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