Business
Africa mergers and acquisitions grew 18% to $25 billion in 2012 – Report
The value of mergers and acquisitions for sub-Saharan African targets rose by 18 percent to US$25 billion last year.
About half or US$12 billion worth of the deals targeted South African companies, said a Thomson Reuters Deals Intelligence report on Sub-Saharan Africa Investment Banking Analysis 2012 released Tuesday.
“The next most targeted nations were Nigeria and DR Congo. South Africa and The United Kingdom were the most acquisitive nations during 2012, accounting for 39 percent and 22 percent of Sub-Saharan Africa target mergers and acquisitions, respectively,” said Thomson Reuters managing director for Africa Keith Nichols.
The Materials, Energy and Power sectors were most active in the mergers and acquisitions deals. Sub-Saharan African investment banking fees declined by 27 percent to US$307.9 million during 2012 from 2011 when fees reached US$421 million.
Year-on-year fee declines were seen across all asset classes except for loans, where fees nearly doubled from 2011. Fees from syndicated lending totaled US$83.8 million during 2012, accounting for 27 percent of the overall Sub-Saharan African investment banking fee pool.
Despite the higher mergers and acquisitions activity, investment bankers did not earn much in terms of fees. Fees from mergers and acquisitions advisory saw the biggest year-on-year decline, falling 60 percent from US$221.1 million during 2011 to US$87.7 million in 2012.
Equity capital markets underwriting fees totaled US$71.3 million during 2012, down 15 percent from the previous year – US$84.1 million, while fees from debt capital markets declined 11 percent to total US$65.1 million for the year.
