Economy
Nigeria Records $204m Local, Cross-Border Deals in H1 2020
By Dipo Olowookere
Despite Nigeria recording more deals in the first half of 2020, the total value of the transactions went down to $204 million (N73.4 billion at N360/$1).
According to the latest Refinitiv M&A data released by Baker McKenzie, there were 26 deals in the period under consideration in contrast to 18 of the first half of last year, indicating a 44 per cent increase.
However, the report said the total deal value of the transactions, which comprised local and cross border, went down by 46 per cent to $204 million from $375 million in H1 2019.
Baker McKenzie explained that this decline in the total value of the deals was likely because most of the deals listed for H1 2020 have no disclosed deal value.
But it said the number of cross border deals increased by 18 per cent in comparison to the first half of 2019, while domestic deals were also up by 86 per cent year-on-year.
The firm noted that about 50 per cent of the mergers and acquisitions transactions in Nigeria were cross border transactions, totalling $40 million, noting that deals were evenly distributed among industries, with financials and high technology recording two inbound deals each and the industrials sector recording two outbound M&A deals.
The $21 million acquisition of Interporto di Venezia SpA in March 2020 by an Orlean Invest Holding subsidiary for $21 million was the biggest cross border deal in Nigeria in the first half of 2020, the report said.
According to the Head of Africa for Baker McKenzie in Johannesburg, Mr Wildu du Plessis, policy and economic uncertainty, including lack of access to foreign exchange, stalled dealmaking in Nigeria in recent years.
“However, the Central Bank of Nigeria (CBN) introduced a foreign exchange window a few years ago, allowing trading at market-determined rates, which boosted the supply of foreign exchange and encouraged dealmakers.
“The government was also looking at more business-friendly legislation. The Nigerian economy was already impacted quite severely by the disruption in oil markets in recent years, but COVID-19 has added extensive damage to the economy, and this will undoubtedly impact negatively on M&A numbers going forward,” he said.
For South Africa, the value of M&A transactions dropped 60 per cent to $3.3 billion in the first half of 2020, down from $8.2 billion for the same period last year (H1 2019).
Also, the volume of M&A deals in the country fell by 18 per cent year-on-year, with 132 transactions recorded in H1 2020, down from 160 in H1 2019.
Domestic M&A activity in South Africa dropped 18 per cent to 64 transactions, down from 78 in H1 2019. Domestic deals were valued at $1.7 billion in H1 2020, down 71 per cent year-on-year.
Cross border transactions reflected the same downwards trend, with M&A volume down 17 per cent to 68 deals, and deals valued at $1.5 billion in the first half of 2020, down 32 per cent from the same period last year.
It was observed that Barloworld’s acquisition of the equity assets of both Wagner Asia Group and SGMS LLC by its Mongolian subsidiary, for $212 million each, were the biggest cross-border transactions in South Africa in the first half of this year.
In the Sub-Saharan Africa (SSA) region, the report said M&A volume decreased 24 per cent to 254 deals, compared to 338 deals for the same period last year.
Also, the total value decreased by 56 per cent to $6.8 billion in the first half of 2020, compared to $15.3 billion in H1 2019, with majority cross border deals at 160 transactions worth $4.8 billion.
It said there were 89 inbound deals in the region during this period, valued at $1.1 billion. The primary target was the materials industry with 24 deals, totalling $305 million.
The United Kingdom and the United States were the primary investors with 17 and 15 deals, worth $161 million and $658 million, respectively.
The region also reported 49 outbound transactions worth $3.6 billion. The industrials sector was the most targeted with nine deals, while the materials and telecommunications sectors had the biggest deal values, totalling $1 billion each.
According to Mr Du Plessis, “There is broad consensus that 2020 and 2021 will be very difficult years across all sectors in Africa, with severe humanitarian challenges, reduced demand across most sectors, constrained domestic economic activity, weaker currencies, supply chain disruptions and increased regulations and restrictions causing business disruption.
“Some sectors will battle to recover while others, such as the technology sector, are likely to be better able to adapt and take advantage of current conditions.”
“M&A activity in Africa going forward could come from distressed M&A transactions. Buyers with strong market positions or balance sheets and an appetite for risk could seek to capitalise on the opportunities available in the most challenged sectors, such as retail, transport, energy, construction, hospitality and leisure, as well as the opportunities in the sectors that have performed well during the pandemic, such as those in technology and healthcare and Fintech.
“The oil & gas industry and non-core infrastructure sectors are also facing significant stress, which might produce opportunities for buyers.
“The bottom line is that there will be very few sectors who have not been badly affected by the pandemic, but this could produce opportunities for buyers who have done their homework and have an appetite for risk,” he added.
According to him, the current developments in terms of the continent’s trade relationships also point to improved investment opportunities in Africa in the medium term.
Shifting global trade patterns have seen the major players turn to Africa to find new avenues for trade and investment.
Examples include the recent Economic Partnership Agreements signed with the UK to govern bilateral trade with certain African countries after Brexit; China’s continued interest in Africa, especially in terms of the Belt and Road Initiative (which might endure short term slowdowns but offers long term gains in digital programmes and sustainability); the recent United States Africa strategy, which has a renewed focus on trade and investment between the two regions; the European Commission’s Comprehensive Strategy with Africa, published after COVID-19 and positioning the EU as an close ally of Africa; and the African Continental Free Trade Area agreement, postponed to 2021 due to COVID-19, and intended to streamline intra-African trade across the continent and reduce the continent’s dependence on foreign investors.
“So, while Africa, alongside the rest of the world, will be weathering the devastating effects of COVID-19 for some time, the future M&A forecast looks brighter, with good investment opportunities becoming clearer across the continent once the pandemic eases,” Mr Du Plessis noted.
In the report, Baker McKenzie said going forward, dark clouds remain over the M&A market in Africa in the short-term, with economic uncertainty likely to cause a reduction in foreign investment in Africa.
However, recent developments regarding Africa’s policies on trade and investment, and its renewed partnerships with major global economies, brighten the continent’s prospects for medium-term recovery, it submitted.
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.
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.
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.
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