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Merger and Acquisition

Helios Investment Partners and Sojitz Corporation Start Collaborations in West African Gas Downstream Businesses

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Helios Investment Partners

Helios Investment Partners (“Helios”), the Africa-focused private investment firm, acting on behalf of funds it advises, and Sojitz Corporation (“Sojitz”), one of the leading conglomerate investment and trading houses listed on the Tokyo Stock Exchange, announced the completion of the sale by Helios of a 25% interest in the holding company of Axxela, the largest private-sector gas distributor in Nigeria, to Sojitz. Helios retains a 75% interest in the company.

This transaction marks Sojitz’s first significant equity investment in Africa, indicating its growth ambitions on the continent and serving as a blueprint for future collaboration in Africa between Helios and Sojitz across a range of sectors. As like-minded shareholders, Helios and Sojitz expect to accelerate further growth of Axxela’s business by leveraging Sojitz’s expertise in developing gas and power infrastructure projects and providing lower-carbon energy solutions to industrial customers globally.

Axxela is a pioneering energy infrastructure company at the forefront of delivering cleaner, cheaper and more reliable energy to industrial customers across West Africa. Its operations support the utilisation of Nigeria’s vast domestic gas resource to drive industrial growth while also facilitating fuel switching by industries to gas, reducing CO2, Nitric Oxide and Sulfur Oxide emissions, which enables the transition to a lower carbon economy. Axxela enabled its customers to reduce their CO2 emissions by 1.7 million tonnes between 2018 and 2020 by switching their energy supply from diesel or Heavy Fuel Oil (HFO) to gas and will expand such contribution to reduce CO2 emissions through the growth of its business.

Axxela Group began operations in 2001 and currently serves over 200 industrial customers across key industrial hubs in Lagos, Port Harcourt, and Sagamu providing a comprehensive energy offering across pipeline gas, compressed natural gas (CNG) and liquefied natural gas (LNG). It also supplies gas to power utilities and industries across the West Africa region, taking advantage of its status as a designated shipper on the West African Gas Pipeline (WAGP), a regional gas pipeline spanning across Benin, Togo and Ghana.

Sojitz is a leading conglomerate whose experience spans several industries including energy (gas, LNG, renewables, power, new clean energies including hydrogen), automotive, aerospace, agriculture, chemicals, consumer goods, healthcare, infrastructure and resources. As a global energy player, Sojitz possesses deep expertise in the gas and power infrastructure sector, where it has been involved in the development of gas distribution networks, LNG terminals and power plants globally.

Under Sojitz’s “Medium-Term Management Plan 2023”, the company aims to adopt a market-oriented initiative in growth industries and in accordance with the plan, has developed a downstream gas business in Vietnam. This know-how will enhance the Axxela Group’s operation and growth and ultimately aim to provide multiple energy solutions meeting individual customer’s requirements while contributing to CO2 reduction.

West Africa’s abundant gas resources have for decades served the energy requirements of Europe and Asia via LNG exports, with modest growth in regional consumption due to the dearth of processing and distribution infrastructure to connect with market demand. Helios and Sojitz together believe that the actionable, economically viable and just energy transition pathway for Africa can be achieved through the accelerated build-out of gas infrastructure, which would enable the switch away from coal and liquid fuels, eliminate routine gas flaring and support the increased penetration of renewable energy by complementing its intermittent supply with reliable and flexible gas-fired power supply.

Ogbemi Ofuya, Partner at Helios Investment Partners, commented: “We feel privileged to enter into this partnership with Sojitz to drive further growth of Axxela’s business. This transaction demonstrates the value of our strategy to build market-leading, strategically important businesses which become highly sought-after by global investors seeking to enter Africa or grow their presence on the continent. Sojitz is a world-class energy infrastructure investor and their investment represents the first Japanese strategic investment in a downstream gas distribution business in Africa. We look forward to working together to accelerate energy access for industrial growth and decarbonisation across Africa.”

Masakazu Hashimoto, COO of Infrastructure & Healthcare Division at Sojitz Corporation, commented: “We are pleased to announce this strategic investment into the Axxela Group, which opens the door for our entry to a gas downstream market in Africa where huge growth potential is expected. Africa is the largest frontier in the 21st century. This transaction embodies our “market-oriented initiative” and “co-creation and sharing methodologies” and begins a partnership between the internationally reputable fund Helios and Sojitz. We expect that this collaboration will create additional value to Axxela and their stakeholders by way of a disciplined investment while ESG issues are fully addressed.”

Mr. Bolaji Osunsanya, CEO of Axxela Limited, commented: “We are delighted to welcome Sojitz to the Axxela family. This represents another first for us as an organisation, and a huge testament of continued investor confidence in our business. It also further affirms our position not only as a market leader, but as a reputable partner enabling industrialisation across Africa. With Sojitz onboard, our capacity is stronger, and we are better situated to attract the requisite capital to continue executing our development-oriented projects.’’

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

Access Bank Backs Off Kenyan Bank Acquisition Deal

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Access Bank has withdrawn its proposal of buying 83.4 percent shareholding in Kenyan Bank, Sidian Bank Limited.

This was made public by Access Holdings who were trading in the transaction as Access Corporation in a filling sent to notify the Nigerian Exchange Limited.

Access Corporation had earlier in June 2022 announced that its flagship subsidiary, Access Bank had reached an agreement to acquire a large chunk of shares worth about $37million held by Centum Investment in the ownership of Sidian Bank.

The filling read “the completion of the proposed transaction was subject to fufillment or waiver of certain conditions before the Long Stop as defined in the agreement. Although regulator have all been supportive in engagements around the transaction, certain conditions precedent needed to prudently complete the transaction have not been met.”

Investors King gathered that Centum’s shares in Sidian Bank had fallen by 2.47 percent in December 2022, the most significant fall in Kenya’s stock market for the year.

Centum had said in their own statement that “the date has passed without all the conditions being fulfilled despite the support of the Central Bank of Kenya, Centum was not able to reach acceptable terms with Access Bank for extension of the share purchase agreement and therefore opted not to pursue extension.”

Access Bank, Nigeria’s biggest lender by assets had planned to double the share of assets outside its home market by 2027 and Kenya’s economy has been predicted to expand at a faster pace than Nigeria’s in coming years.

However, the Bank in its statement said it will continue to pursue its plan to buy more assets in Kenya and the East Africa.

“The bank remains, however, committed to growing its franchise in a safe and sound manner in Kenya and the broader East Africa community and will continue to explore a variety of organic and inorganic opportunities to grow.”

Access Bank had in 2019 acquired 94% of Kenyan lender Transnational Bank Limited.

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Merger and Acquisition

Microsoft Moves to Deepen Effort in Web Search, In Talks to Acquire ChatGPT

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American multinational technology company Microsoft seeks to boost efforts in its web search as it plans to invest in Open AI chatbot, ChatGPT.

Reports reveal that both parties have been in talks for months as the tech giant has offered a proposal of a $10 billion investment.

If the deal goes through, it will see ChatGPT’s valuation rise to $29 billion, while Microsoft will get a 75% share of the company’s profit.

Microsoft is currently seeking to edge out its rival Google as it is reportedly working to launch a version of its Bing search engine that is powered by an AI tech that is currently used in ChatGPT, as it will be unveiled at the end of March.

The ChatGPT has been a hot topic on the internet for some weeks since its launch on November 30, 2022, for its ability to create content, develop code, write essays, etc.

The Open AI chatbot’s core function is to mimic a human conversation including its ability to write and debug code as well as computer programs.

A lot of people have disclosed that the ChatGPT could pose a serious threat to tech giant Google, and probably displace it from being the dominant search engine worldwide.

Investors King understands that this is why Microsoft aims to integrate the Open AI chatbot into its bing search engine, in order to boost its user count and dominate the web search.

Reports reveal that Microsoft hopes for a more conversational search experience in which a bot provides contextual replies based on search queries.

Despite the superb ability of the ChatGPT, it has been disclosed to have a few limitations. The app has been revealed to sometimes write plausible-sounding but incorrect or nonsensical answers.

It has also been reported to have limited knowledge of events that occurred after 2021. However, OpenAI CEO, Sam Altman has expressed reservations about ChatGPT’s current capabilities.

In a tweet last month, he tweeted that it would be a mistake to be relying on the chatbot for anything important, noting that it’s currently merely a preview of progress rather than the finished product.

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Merger and Acquisition

Otedola Moves to Sell Part of Geregu Power Plc to FEDA

Afreximbank to acquire part of Geregu Power plant

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Geregu Power

Billionaire Femi Otedola-owned energy company, Geregu Power Plc is in talks with the Fund for Export Development in Africa (FEDA) for the acquisition of part of the energy company.

The company stated in a statement signed by Akinleye Olagbende, Company Secretary and made available on the Nigerian Exchange Limited (NGX).

Geregu Power hereby notifies “Nigerian Exchange Limited (the Exchange) and the investing public of its discussions with the Fund for Export Development in Africa (FEDA) for the acquisition of a portion of Geregu Power Plc shares. FEDA is the impact development arm of the Africa Export and Import Bank (Afreximbank),” the company stated.

According to the energy firm, talks are presently ongoing and “where these talks progress to a more advanced stage, the company will notify the Exchange and the investing public in line with the rules of the Exchange.”

In October, Geregu Power listed 2.5 billion shares at N100 a unit on the Main Board of the NGX. This puts the company’s market value at N250 billion and also in a better position it to raise capital to bid for Geregu II as it is presently doing.

Speaking on the listing, the Chairman, Board of Directors, Mr. Femi Otedola, CON, said “the listing of the company was the actualization of a vision to bring world-class standards in governance sustainability, and business processes to the Company and the Nigerian electricity sector.”

He added that “listing on the Main Board of the Exchange will ensure that the long-term growth of the company is assured and its benefits will be passed on to our esteemed shareholders”.

Otedola is the largest shareholder in FirstBank and also holds a 99% stake in Amperion Power, the owner of the Geregu Power Plant.

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