Economy

Mergers, Acquisitions Activity Drops Sharply in Africa in H1 2018—Report

Published

8 years ago

13/07/2018

By Modupe Gbadeyanka

An analysis by Baker McKenzie of Thomson Reuters M&A data for Africa has revealed that in the first half of 2018, the total deal volumes and values of Merger & Acquisition (M&A) transactions in Africa fell sharply by 44 percent in deal volume and 57 percent in aggregate value, compared with the first half of 2017.

The report noted that there were 485 deals valued at $19.420 million in the first half of 2017, this dropped to 270 deals valued at $8.318 million in H1 2018.

On a positive note, intraregional cross-border deals rose twofold in terms of aggregate value from $418 million in the first half of 2017 to $1.292 million in H1 2018.

Managing Partner and Head of the Corporate/M&A Practice at Baker McKenzie in Johannesburg, Mr Morne van der Merwe, in an emailed statement made available to Business Post on Thursday, explained that, “Africa is a continent with 54 different countries, all with different economies and so it is difficult to pin down specifically what has caused the downturn in M&A activity in the first half of the year.

“Generally, inbound investment in Africa has been affected by political uncertainty and unpredictability – business does not mind challenge but has no affinity for uncertainty.

“Corruption and bad governance, as well as the strict anti-bribery and anti-corruption laws in some investor countries, such as the United States and the United Kingdom, has made investors more cautious.”

Intraregional trade

“Despite the downturn in M&A transactions, it appears that regional economies are developing and intraregional trade is doing well. East Africa is developing a strong regional focus and had almost left the Southern African region behind, although this region has come back onto the radar of late,” Mr van der Merwe noted.

He explained further that certain economies such as Ethiopia are becoming more of a discussion point as popular investor destinations in Africa because of interesting development initiatives taking place in this country.

The majority of the intraregional deals in Africa were in the High Technology Sector (cutting edge or advanced technology) which accounted for 21 percent of all deals. Interregional dealmaking value was highest in the financial sector which made up 82 percent of the total value.

There were four High Technology intraregional deals in Africa in the first half of 2018. Intraregional deals in the financial sector in H1 2018 were worth $1.056 million.

Mr Van der Merwe disclosed that the financial services sector, especially banks and insurance companies have been deploying various models for their expansion into Africa, including regionally focused strategies.

“Lessons I have picked up from these markets include that having the right local partner remains key to being successful in Africa and that it is important it to think twice before you impose your brand on a market where you have recently made an acquisition.

“This is because you may change the recently acquired company from what had made it successful in the first place. Keeping the local brand and management in place has worked very well for some in the financial services sector who have expanded into Africa,” he noted.

Mr Van der Merwe explained that events such as Barclays withdrawing from Africa had left many wondering how a financial giant like Absa would rethink its strategy and possible expansion into Africa, and it will be interesting to follow the unfolding of their strategy to position themselves as an African Bank.

“I think that expanding into the continent and having a regional approach as part of that expansion is something they are most likely thinking about very carefully,” he said.

He noted that the growth in investment in both the financial services sector and the technology sector in Africa are interlinked. Financial services organisations are becoming more dependent on investment in technology and innovation as they look to upgrade their IT systems and find news way to grow their customer bases.

Inbound

In terms of inbound cross-border transactions with other regions, Industrials was the most popular by deal volume (16 percent share of the total) with 16 deals completed in the first half of the year. Energy & Power attracted the highest share of aggregate deal value (35 percent of the total value), with deals valued at $1.493 million.

“The industrials sector is a focus area for many developing economies across the continent and the sector is well established, leading to many more opportunities than one would find in less well established sectors,” he said.

Mr Van der Merwe explained also that the extent of the power deficit in Africa is well known and increasing electricity generation, whether on-grid or off-grid, across the continent is the focus of a number of initiatives, all of which are driving investment.

In terms of foreign investors, the United States (US) was the most acquisitive in Africa, representing 18 percent of deal volume and 39 percent of deal value. The US completed 18 deals in Africa in H1 2018, worth $1.694 million.

“The US has been a significant investor in the African continent for some time. Trump’s policies have played out well for certain countries in Africa and the relationship between the US and Africa is very much focused on strategic bilateral relationships influencing the direction of investment flow,” he noted.

Outbound

In terms of outbound deals, High Technology had the highest volume of outbound interregional cross-border deals (13 percent of total deals). There were eight outbound deals in the High Technology sector in the first half of the year. Real Estate accounted for the highest share in aggregate value at 27 percent of total value of outbound deals. This sector completed $430 million worth of deals in H1 2018.

“The high number of outbound technology deals from Africa is because African tech companies are targeting offshore investments in companies that will deepen their access to new technologies, markets and talent,” he said.

The real estate sector attains prominence because of relative value of real estate as an asset class.

“As economies develop, so does real the estate sector. For example, the expanding middle class and consumerism in Africa has led to a growth in the consumer goods sector and real estate development is part of that as new shopping centres are developed.

“Also, African infrastructure development is high on the agenda across the continent and there is a big real estate element associated with that as well,” he explained.

The UK had the highest number of investors from Africa during the period H1 2018 (20 percent share), with 12 deals being completed in the first half of the year. India was the most attractive market in terms of value (46 percent of total value). African dealmakers completed transactions worth $735 million in India in H1 2018.

“The ease of doing business with the UK brought about by various factors, including, time zones, easy access, language, historical ties and familiarity has meant that investment between the UK and numerous African countries has always been good. Brexit has impacted positively on investment in that it has caused UK trade outreach initiatives to various historic trade partners,” Mr van der Merwe explained.

“With regards to India being a popular investment destination for African businesses to invest, this is because like Africa, India is a developing economy. African investors are astute in seeking out opportunities in these economies because the environment and challenges are often similar, or at least comparable.

“This makes it easier to build a relationship with local partners, which is so necessary for successful investment.

“India is also a very large economy and so huge opportunities can be accessed for investors who know where to look.

“In addition, historical ties between India and many countries in Africa adds to the familiarity and relative ease of doing business,” he added.

Economy

Odu’a Investment Buys 10% Stake in FCMB Pensions

Published

2 hours ago

17/03/2026

Adedapo Adesanya

By Adedapo Adesanya

A 10 per cent equity stake has been acquired by Odu’a Investment Company Limited in a subsidiary of FCMB Group Plc, FCMB Pensions Limited.

The move is aimed at strengthening its presence in Nigeria’s growing pension industry.

The company disclosed that the transaction was completed after receiving all required regulatory approvals from the National Pension Commission (PenCom) and the Central Bank of Nigeria (CBN), while the Securities and Exchange Commission (SEC) has also been duly notified.

Odu’a Investment said the acquisition represents a strategic investment in a resilient and steadily expanding segment of Nigeria’s financial services sector.

The company added that the deal also reinforces FCMB Pensions’ shareholder base through the entry of a long-term institutional investor.

Chairman of Odu’a Investment Company Limited, Mr Bimbo Ashiru, said the investment aligns with the organisation’s strategy of partnering with strong institutions operating in sectors critical to Nigeria’s long-term economic stability.

“This investment reflects Odu’a’s strategy of partnering with strong institutions operating in sectors that are central to Nigeria’s long-term economic stability and growth,” he said in a statement.

“The pension industry plays a critical role in mobilising long-term savings and strengthening the financial system. FCMB Pensions has built a solid platform serving contributors across Nigeria, and we see a significant opportunity to support its continued growth and impact,” he added.

Also commenting on the transaction, the Managing Director of Odu’a Investment Company Limited, Mr Abdulrahman Yinusa, described the deal as a vote of confidence in FCMB Pensions’ leadership and long-term prospects.

“Our partnership with FCMB Group Plc reflects confidence in FCMB Pensions’ strategy, leadership, and long-term potential. Together, we will work to expand its reach, support its strategic objectives, and deliver sustained value to contributors and other stakeholders,” Mr Yinusa said.

The investment brings together two established institutions with complementary strengths and a shared focus on long-term value creation. According to the company, the partnership positions FCMB Pensions to deepen market penetration and enhance service delivery within Nigeria’s contributory pension scheme.

Odu’a Investment Company Limited is an investment holding company jointly owned by the governments of the six South-West states of Nigeria.

The firm manages a diversified portfolio spanning real estate, financial services, hospitality, agriculture, and industrial investments, with a mandate to generate sustainable economic value and support regional development.

Economy

Global Investors Now Interest in Nigeria Because of Reforms—Popoola

Published

2 hours ago

17/03/2026

Aduragbemi Omiyale

By Aduragbemi Omiyale

The chief executive of the Nigerian Exchange (NGX) Group Plc, Mr Temi Popoola, has said Nigeria’s capital market is undergoing a re-rating as global investors begin to reassess the country’s economic trajectory and investment potential.

“What we are seeing is a gradual re-rating of Nigeria. investors are beginning to look at the data more closely, the returns, the reforms, and the improving macroeconomic direction, and that is changing sentiment,” he said during a live interview on BBC Newsday in London.

He is in the United Kingdom as part of broader investor and stakeholder engagements during President Bola Tinubu’s state visit to Buckingham Palace.

Mr Popoola explained that Nigeria’s equity market has delivered strong returns in recent months, positioning it more competitively among emerging and frontier markets. According to him, this performance is helping to recalibrate long-held risk perceptions and attract renewed interest from international investors.

He added that improvements in Nigeria’s energy landscape, including increased domestic refining capacity and ongoing sector reforms, are helping to reduce the economy’s exposure to external oil price shocks, further strengthening investor confidence.

Mr Popoola emphasised that beyond short-term market movements, consistency in policy implementation will be critical in sustaining this shift in perception. “Global capital responds to clarity and consistency. As those elements become more evident, Nigeria naturally becomes more investable.”

He also highlighted the importance of sustained engagement with global financial centres, noting that platforms such as London play a key role in connecting Nigeria’s capital market to international pools of capital.

According to him, Nigeria’s evolving market structure, combined with ongoing reforms, is strengthening its position as a viable destination for long-term investment. “There is a broader recognition that Nigeria offers significant opportunities. The focus now is ensuring that this recognition translates into sustained capital flows.”

The NGX group chief concluded that Nigeria’s capital market is increasingly being viewed through a more balanced and data-driven lens, reflecting both its resilience and its long-term growth potential.

Economy

Luno Introduces Crypto Price Prediction Product in Nigeria

Published

4 hours ago

17/03/2026

Adedapo Adesanya

By Adedapo Adesanya

Global cryptocurrency platform, Luno, has launched a structured crypto prediction markets product in Nigeria, which will enable customers to apply their market knowledge to short-term crypto price events and earn USDC when their insights are correct.

The prediction market allows customers to express a view on whether the price of selected crypto assets, being BTC, ETH, SOL, DOGE, and XRP, will be above or below the daily price event. The market operates daily with clearly defined rules and settlement periods, offering customers structured, time-bound opportunities to act on their conviction.

Nigeria remains one of the most active crypto markets globally, with increasing demand for tools that combine simplicity and transparency. By introducing Prediction Markets focused solely on price levels, Luno aims to provide a fast, confident, and opportunity-forward format for market engagement.

Unlike traditional gaming or prediction firms like Polymarket and Kalshi, in which the odds are set by the company, Luno’s Prediction Market, powered by Limitless, is focused exclusively on crypto asset price movements within the Luno platform.

This means customers are not purchasing the underlying asset, but participating in a defined, outcome-based market that settles transparently based on real-time price data.

According to a statement, the launch reflects a broader shift in how customer behaviour is evolving in Nigeria’s growing crypto asset ecosystem, particularly as crypto asset adoption matures, many users are seeking more flexible and responsive ways to engage with markets beyond long-term holding or traditional spot trading.

Luno’s Prediction Markets product is designed to meet this demand within a familiar and regulated platform environment. The feature builds on how customers already interact with crypto asset prices – analysing charts, following market news, and forming views- and provides a structured framework for expressing those views.

According to Mr Ayotunde Alabi, chief executive of Luno Nigeria, the company is combining crypto education with a secure platform to help Nigerians confidently apply their market knowledge in a responsible and practical way.

“We are seeing a clear shift in how Nigerians want to engage with crypto assets. Many already follow price movements closely and form strong market views; we want to lead with education as well as provide a safe and secure platform to help them apply that knowledge. This feature is designed to be a natural extension for those who enjoy forecasting.

“By tying this to our ongoing educational initiatives, such as our scholarships with AltSchool, we are encouraging users to apply what they have learned about market analysis into a practical, responsible framework. Our priority is ensuring that where confidence meets opportunity, it is supported by the standards of trust our customers expect.”

Luno said it will further support the rollout with Learn & Earn educational content and tutorials explaining market mechanics and price determination. To promote informed decision-making and ensure the product is used responsibly,

Luno has embedded specific controls, including customers reading and acknowledging a risk disclosure before participating, as well as moving funds from their ordinary USDC wallet to a separate prediction wallet, which will be used to participate in prediction markets.

The firm also said that customers cannot hold both sides of the same market, in this case, Above and Below at the same time.