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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, 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

Bankman-Fried’s FTX Says no Talks to Acquire Robinhood

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Sam Bankman-Fried’s FTX crypto exchange said it is not in talks to acquire Robinhood Markets Inc, after a report on Monday claimed the exchange was exploring such a deal.

Bloomberg News reported on Monday FTX was discussing internally how to buy the app-based brokerage and that Robinhood had not received a formal takeover approach, citing people with knowledge of the matter.

“There are no active M&A conversations with Robinhood,” Bankman-Fried said in an emailed statement.”We are excited about Robinhood’s business prospects and potential ways we could partner with them.”

Robinhood declined to comment. The retail-trading platform’s shares were down 5% in extended trading after jumping over 14% on the report.

Last month, the founder and chief executive of FTX revealed a 7.6% stake in Robinhood but said he did not have any intention of taking control of the retail-trading platform.

Robinhood’s dual-class shares give its founders control of 64% of the voting shares outstanding, making it virtually impossible for takeovers without their support.

The popular trading platform has come under pressure this year as trading volumes ease from 2021’s frenetic pace – when retail investors used it to pump money into shares of so-called meme stocks such as GameStop and AMC Entertainment.

That slowdown, along with a sell-off in high-growth technology stocks, has driven a near 50% slump in Robinhood shares this year. The company had a market valuation of nearly $7 billion as of Friday’s closing price.

FTX’s U.S. arm announced in May it would launch a stock trading platform by the end of the summer. Last week, it acquired partner Embedded Financial Technologies for an undisclosed amount, which would add custody, execution and clearing services to its equity trading platform.

FTX and its billionaire founder Bankman-Fried have rescued other players during the crypto market’s recent crash. It provided crypto lender BlockFi with a $250 million revolving credit facility to help the firm avoid a liquidity crunch.

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Merger and Acquisition

Access Bank Moves to Acquire 83% Stake in Kenya’s Sidian Bank Limited

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Access Bank Plc, a subsidiary of Access Bank Holdings Plc, has entered into a binding agreement with Centum Investment Plc for the acquisition of 83.4% equity held by Centum in Sidian Bank Limited in Kenya.

Access Bank announced the acquisition in a statement signed by Sunday Ekwochi, Company Secretary, Access Bank and obtained by Investors King.

The acquisition is estimated at US$37 million or N15 billion. This represents a price to book multiple of 1.1x based on the audited 31 Match 2022 shareholder’s equity of Sidian.

According to Access Bank, upon completion of the acquisition, Sidian will be merged with Access Bank’s subsidiary in Kenya, Access Bank Kenya to create a stronger banking institution better positioned to serve the Kenyan market.

Commenting on the deal, the Group Chief Executive, Access Bank, Mr. Herbert Wigwe, said “This growth transaction being implemented in Kenya represents the relentless focus and execution of our strategic objectives within our banking subsidiary even as we grow the other businesses within Access Corporation’s core segments. The acquisition of Sidian is a significant step-up in scale and potential for Access Bank in Kenya which represents the largest market and trade corridor in East Africa.

“The significant increase in scale and customer base presents us with enormous opportunities to support growth in the various ecosystems we are building in our trade and payment business.

“The economies of scale that derive therefrom will continue to drive and enhance contributions to all stakeholders.”

Also commenting on the transactions was Mr. Roosevelt Ogbonna, the Chief Executive Officer of Access bank. Ogbona explained that the acquisition will strengthen the bank’s presence in Kenya and support geographic earnings growth and diversification.

He said “this transaction builds on our earlier acquisition of the former Transnational Bank Plc (now Access Bank Kenya) and underscores our resolve to strengthen our presence in Kenya, a ley African market that fits into our strategic focus for geographic earnings growth and diversification.

“The acquisition and intended subsequent merger will create a strong and competitive balance sheet for Access Bank in Kenya, positioning us to be well-placed to promote regional trade finance and other cross border banking services in the East African Community (“EAC”) and broader COMESA region.

“The proposed combination with Access Bank Kenya would undoubtedly propel Access Bank into a strong contender in the Kenyan market with enhanced capacity to play a more impactful role in the growth of its economy while delivering increased profitability for our shareholders.”

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Merger and Acquisition

Access Holdings Plc to Acquire Majority Stake in First Guarantee Pension Limited

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Access Holdings Plc has agreed with First Guarantee Pension Limited to acquire a majority stake in the company in its drive to transform from a narrow banking business into a financial service company.

The leading financial institution stated in a press release obtained by Investors King on Thursday.

According to Access Bank, the transaction is in line with its strategy to evolve into a full-blown financial services company and gain relevant market share across Africa, global monetary centres and beyond banking verticals.

Speaking on the firm’s push to change the banking landscape, Dr. Herbert Wigwe, Group Chief Executive Officer, Access Corporation said “This transaction is a natural evolution for us. Over the last 20 years, we set our sights on and delivered ambitious plans to transform the African financial services landscape focusing on banking and have created the African leading Bank and largest bank by customer base.

“This large customer base both on the wholesale and retail segments makes the pension business a natural fit for the Corporation given its objective of ecosystem optimisation. We will leverage our well-established culture of strong corporate governance, risk management, cutting-edge technology, and digital capabilities to deliver high standards of professionalism in the management of pension assets to the benefit of our stakeholders.”

The firm added that the National Pension Commission and the Central Bank of Nigeria have given their no objection to the transaction.

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