Mergers and Acquisitions within sub-Saharan Africa were valued at $4.7 billion in 2018, a 39 per cent decline compared to 2017.
According to the Thomson Reuters’ financial and risk business –Refinitive, this is the lowest value of buyouts and consolidations since 2002.
One of the most lucrative deals in Kenya was SBM Holdings’ acquisition of Chase Bank Kenya Ltd (in receivership), at $86 million (Sh8.74 billion).
The Mauritius-based lender also acquired Fidelity Commercial Bank in May 2017.
According to the report, acquisitions by companies headquartered in the Mauritius accounted for 23 per cent of sub-Saharan outbound M&A activity in 2018.
M&A activity in the banking sector is expected to pick up this year after a slowdown witnessed in 2017 with KCB Group finalising its takeover of Imperial Bank Ltd (in receivership).
2017 acquisitions included Diamond Trust Bank Kenya buying Habib Bank (K) Limited, Giro Commercial Bank was acquired by I&M Holdings while Oriental Commercial Bank was acquired by Bank M of Tanzania.
The Commercial Bank of Africa has also expressed plans to merge with National Industrial Credit (NIC) Bank to form the country’s third largest lender. The Kenyatta family-owned lender has also made a Sh1.4 billion cash offer to buy Jamii Bora Bank.
Other significant deals witnessed throughout the year were the acquisition of KenolKobil by French firm Rubis Energie at an estimated Sh36 billion and Vivo Energy’s acquisition of Engen in eight African countries including Kenya valued at Sh20 billion.
Inbound M&A deals were valued at $12.7 billion, a 14 per cent decline compared to 2017. Most of these deals originated from the UK, US and the United Arab Emirates with the most lucrative states reported as South Africa, Nigeria and Mauritius.
“Inbound M&A was down 14 per cent year-on-year, driven by the lowest number of deals since 2005,” the report stated.
Mergers and consolidations originating from sub-Saharan Africa were valued at $6.1 billion, a 26 per cent decline from 2017 with the most acquisitive nations cited as South Africa followed by Mauritius and Zimbabwe. The most targeted nations were India, Morocco and Saudi Arabia. “The value of announced M&A transactions with any Sub-Saharan African involvement reached $31 billion during 2018, down 12 per cent from 2017 to a six-year low,” the report stated.