Merger and Acquisition
UK Regulator Blocks Microsoft’s $75bn Activision Blizzard Acquisition
In a major setback for tech giant Microsoft, the UK’s Competition and Markets Authority (CMA) has blocked its $75bn acquisition of video game publisher Activision Blizzard.
The decision is seen as a significant blow to Microsoft, which had hoped to expand its gaming business with Activision’s popular franchises such as Call of Duty and Candy Crush.
The CMA had expressed concerns that Microsoft’s acquisition would lead to exclusivity of Activision’s games on its own cloud gaming service, thereby impeding innovation in the nascent cloud gaming market.
The regulator’s decision has been met with criticism from both Microsoft and Activision Blizzard, with the latter calling it a “disservice to UK citizens”.
Microsoft’s Vice-Chair and President, Brad Smith, has vowed to appeal the ruling, warning that it “discourages technology innovation and investment in the United Kingdom”.
Activision Blizzard’s shares saw an 11% drop in pre-market trading following the news of the ruling.
The CMA’s decision highlights the growing concerns around the power of big tech companies and their impact on competition and innovation.
The regulator’s move is likely to have implications for other tech giants looking to acquire companies in the UK, as they may face greater scrutiny from regulators concerned about their impact on competition.
While the ruling may be a setback for Microsoft, it is a sign that regulators are taking their role in ensuring a level playing field seriously. As the digital economy continues to evolve, it is essential that regulators keep pace with these changes to ensure that competition remains fair and innovation is protected.
Merger and Acquisition
Seplat Energy and ExxonMobil Extend Share Sale Agreement Amid Legal Proceedings
Seplat Energy and ExxonMobil have announced the extension of their Share Sale and Purchase Agreement (SSPA) for the acquisition of ExxonMobil’s share capital of Mobil Producing Nigeria Unlimited (MPNU).
The extension comes as both companies navigate ongoing legal proceedings and seek to secure regulatory approvals necessary for the transaction.
Seplat Energy, a prominent Nigerian independent oil and gas company, has been actively pursuing the acquisition of ExxonMobil’s share capital of MPNU, with the aim of strengthening its position in the industry. However, while the extended agreement is a testament to Seplat Energy’s determination to acquire ExxonMobil’s share unit, the legal challenges surrounding the deal remain complex.
Therefore, the extension of the SSPA will allow both Seplat Energy and ExxonMobil to preserve the transaction until the resolution of the ongoing legal matter with the Nigerian government.
The extended agreement also affords the opportunity for further negotiations and discussions between the two companies. It allows them to explore potential modifications to the original terms, ensuring that the finalized agreement aligns with their mutual interests and objectives.
Merger and Acquisition
Smile Identity Expands Operations Across Africa, Acquires Appruve to Improve Identification Verification Services
Software company Smile Identity has expanded its operations across Africa, following the acquisition of Ghanaian company Appruve, to improve identification services.
The acquisition will enable Smile to integrate Appruve’s technology into its platform, making it more robust and efficient in the detection and prevention of fraud. Smile revealed that its recent acquisition will solidify its position as Africa’s leading identity verification and digital KYC provider.
The company further stated that it is actively fulfilling regulatory requirements to finalize the transaction for the (inclusive innovation) affiliated entities in Africa.
Speaking on the acquisition by Smile Identity, CEO of Appruve Paul Damalie said,
“These are relevant localized data that have long been left out of the bigger pool of KYC and fraud prevention. It’s these capabilities, experience, and know-how that we are bringing on board, working together with Smile, which just launched an AML product, to build a fully comprehensive product and solution for the market”.
Appruve is an API that enables the verification of user identity, fraud detection, regulatory compliance, and digital documentation.
On the other hand, Smile Identity hopes that the acquisition will help it expand its suite of APIs, which includes data, anti-fraud checks and mobile money, allowing it to cover over 1 billion Africans, the African diaspora, and 100 million African businesses, supporting over 230 documents and data types with integration options for every device and operating system combination in Africa.
Founded in 2016 with its base in Lagos, Smile Identity offers onboarding, user authentication, identity verification, and digital KYC service for Africa. It offers biometric authentication, customer onboarding, document verification, fraud prevention, user verification, KYC compliance and business verification services.
Investors Kings understands that the startup has been building their product since 2017 and are ready to take to new limits. In February 2023, Smile Identity, raised a $20 million Series B fund to ramp up their products across the continent.
Merger and Acquisition
Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 3.8 Billion in Q1 2023
Refinitiv, an LSEG (London Stock Exchange Group) business, today released the Q1 2023 investment banking analysis for the Sub-Saharan African.
According to the report, an estimated US$64.8 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2023, down 50% from the first quarter of 2022 and the lowest first quarter total since 2010. Fees declined 66% compared to the fourth quarter of 2022.
An estimated US$64.8 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2023, down 50% from the first quarter of 2022 and the lowest first quarter total since 2010. Fees declined 66% compared to the fourth quarter of 2022. Equity capital markets underwriting fees totalled US$9.6 million, an increase of 9% compared to the first quarter of 2022, which ranked as the slowest first quarter for Sub-Saharan Africa IB fees since 2010. Debt capital markets fees declined 47% to US$23.2 million, while syndicated lending fees declined 15% to a nine-year low of US$18.0 million.
Advisory fees earned from completed M&A transactions in the region reached US$14.0 million during the first quarter of 2023, down 75% from 2022 levels and marking the slowest first quarter for M&A fees in Sub-Saharan Africa since 2005. Seventy-four percent of all Sub-Saharan African fees were generated in South Africa during the first quarter of 2023, followed by Ivory coast (8%) and Nigeria (5%). JP Morgan earned the most investment banking fees in the region during the first quarter of 2023, a total of US$14.3 million or a 22% share of the total fee pool.
MERGERS & ACQUISITIONS
The value of announced M&A transactions with any Sub-Saharan African involvement reached US$2.9 billion during the first quarter of 2023, an 80% decline compared to first quarter 2022 and the lowest first quarter total since 2003. The number of Sub-Saharan African deals declined 30% compared to a year ago, a nine-year low. Deals involving a Sub-Saharan African target totalled US$2.3 billion during the first quarter of 2022, down 81% from 2022 levels and a three-year low. The number of deals declined 28% from last year. Inbound deals involving a non-Sub-Saharan African acquiror declined 85% to US$1.5 billion, while domestic deals declined 64% to US$838.6 million. Sub-Saharan African outbound M&A totalled US$384.1 million, down 53% compared to the value recorded during 2022 and a nine-year low.
Materials deal making totalled US$699.4 million, or 30% of first quarter 2023 Sub-Saharan African involvement M&A activity, an increase of 34% compared to a year ago. Energy & Power and Consumer Products & Services rounded out the top three sectors for first quarter 2023 M&A activity. Nigeria was the most targeted nation, followed by Zimbabwe and South Africa. Java Capital (Proprietary) Ltd topped the any Sub-Saharan African involvement announced M&A financial advisor league table during the first quarter of 2023.
EQUITY CAPITAL MARKETS
Sub-Saharan African equity and equity-related issuance totalled US$276.2 million during the first quarter of 2023, a 44% decline compared to the same period in 2022. Just one issue was recorded in the region, equalling first quarter 2021’s deal count, the lowest first quarter tally in more than two decades. South African retail firm Pepkor Holdings was the only company in the region to raise new equity funds during the first quarter of 2023, with its follow-on offering raising US$276.2 million. No initial public offerings or convertible bonds were recorded. Morgan Stanley and Capitalmind Investec shared first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2023.
DEBT CAPITAL MARKETS
Overall Sub-Saharan African debt capital markets activity totalled US$3.8 billion during the first quarter of 2023, down 66% compared to first quarter 2022 and the weakest opening period for DCM activity in the region since 2016. A total of 13 new offerings were brought to market in the first quarter of 2023, a 41% decline compared to a year ago and a four-year low. Ivory Coast was the most active issuer nation during the first quarter of 2023, accounting for 65% of total bond proceeds, followed by South Africa (32%). Government & Agency issuers accounted for 65% of proceeds raised during first quarter 2023, while Industrials issuance accounts for 26%. JP Morgan took the top spot in the Sub-Saharan African bond bookrunner ranking during the first quarter of 2023, with US$831.5 million of related proceeds, or a 22% market share.
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