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
Waltersmith Refining and Petrochemical Company Limited has announced plans to commence two further phases of expansion, which will include the construction of a 30,000-barrel-per-day condensate refinery and an industry park that will accommodate other gas-based firms.
The chairman of Waltersmith Petroman, Mr Abdulrazak Isa, revealed this during a visit of the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr Felix Omatsola Ogbe, and the chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr Saidu Mohammed, to the Waltersmith modular refinery at Ohaji- Egbema, Imo State.
Mr Isa said the firm would develop a gas line that would deliver 100 million standard cubic feet of gas per day, and provide an embedded captive power, to attract industries to co-locate in the industrial park.
Plans are afoot to conclude the partnership agreement for the condensate refinery by the 4th quarter of 2026, he said, adding that feedstock for the integrated expansions will come from the Ibigwe and Assa fields, as well as from nearby fields.
The chairman underlined the company’s determination to invest in the petrochemical sector, leveraging its access to gas and Naphtha, noting that the petrochemical industry is a key enabler of the economy.
He sought approvals from the NMDRA for the various stages of the upcoming developments.
The visit was to inspect the newly completed expansion of the firm’s refining capacity, from 5,000 barrels per day to 10,000 barrels per day.
NCDMB invested equity in Waltersmith Refining and Petrochemical Company Limited’s modular refinery in 2018 and helped catalyse the investment, leading to the commissioning of the first phase of the plant in November 2020.
NCDMB also participated in the expansion, which is now completed and operational, producing AGO (diesel), Household kerosine (HHK), HFO (Heavy Fuel Oil) and Naphtha.
The refinery has to date supplied over 1.1 billion litres of refined products to local and regional markets, helping to strengthen Nigeria’s and West Africa’s energy security and contributing immensely to the national economy. The refinery supplies most of its products to the South-East and South-South parts of the country, while the HFO gets to the West African sub-region.
On his part, Mr Mohammed expressed his delight at the success of the facility and promised the agency’s support to the company’s expansion plans, saying the midstream sector of the petroleum industry holds the key to the nation’s economic development, adding that the establishment of such projects is the dream of every administration.
He described Waltersmith as an octopus in the midstream sector and challenged the company to hasten the development of the condensate refinery. Mohammed also commended NCDMB for partnering with Waltersmith to develop the project, which had become a runaway success.
The Director of Legal Services at NCDMB, Mr Naboth Onyesoh, who represented the organisation’s scribe, conveyed the board’s delight at the success of Waltersmith modular refinery, describing the company as a model in local content implementation, especially in direct and indirect job creation, capital retention, industrialisation, import substitution and value addition to crude oil and gas resources.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited was bullish last week despite investors’ mood swing, triggered by happenings in the country and across the globe, especially the Middle East crisis.
The All-Share Index (ASI) and the market capitalisation appreciated week-on-week by 3.94 per cent to 225,722.49 points and N145.335 trillion, respectively.
Similarly, all other indices finished higher with the exception of the growth and commodity indices, which depreciated by 0.02 per cent and 0.41 per cent, respectively, while the sovereign bond index closed flat.
A look at the price changes of shares in the five-day trading week showed that
46 stocks gained weight versus 61 stocks of the previous week, 53 equities shed weight compared with 36 equities a week earlier, and 47 shares closed flat, in contrast to 49 shares of the preceding week.
UAC Nigeria led the gainers’ chart after it chalked up 42.00 per cent to trade at N142.00, Union Dicon appreciated by 32.73 per cent to N21.90, NASCON expanded by 32.63 per cent to N206.90, Trans-Nationwide Express rose by 30.58 per cent to N7.90, and Zichis improved by 25.71 per cent to N15.60.
On the flip side, Infinity Trust Mortgage Bank led the losers’ group after it gave up 50.79 per cent to close at N9.35, Abbey Mortgage Bank declined by 33.33 per cent to N5.40, Guinea Insurance slipped by 15.20 per cent to N1.06, Stanbic IBTC lost 13.82 per cent to settle at N162.50, and Living Trust Mortgage Bank slumped by 10.98 per cent to N3.65.
As for the activity log, Customs Street recorded a turnover of 3.805 billion shares worth N213.955 billion in 297,202 deals in the week compared with 3.588 billion shares valued at N195.313 billion transacted in 254,553 deals in the previous week.
Financial stocks led the activity chart with 2.739 billion units sold for N106.269 billion in 135,101 deals, contributing 71.99 per cent and 49.67 per cent to the total trading volume and value, respectively.
Services equities traded 212.324 million units worth N4.024 billion in 17,042 deals, and consumer goods shares exchanged 180.076 million units valued at N13.269 billion in 32,457 deals.
Access Holdings, UBA, and First Holdco were the busiest with 814.060 million units traded for N39.032 billion in 37,195 deals, contributing 21.40 per cent and 18.24 per cent to the total equity turnover volume and value, respectively.
By Aduragbemi Omiyale
The 65th Annual General Meeting (AGM) of the Nigerian Exchange (NGX) Group Plc has been fixed for Wednesday, April 29, 2026, at 11:00 am at its corporate head office on 2–4 Customs Street, Lagos.
Business Post gathered that the meeting would be streamed live on the company’s website and social media platforms to enable broader participation by shareholders and stakeholders unable to attend physically.
As part of a special business, shareholders will consider a proposed bonus issue of one new ordinary share for every three existing shares held as at the close of business on April 10, 2026, subject to regulatory approvals.
The proposal also includes an increase in the organisation’s share capital from N1,102,309,954 to N1,469,746,605, to accommodate the bonus shares and amendments to the Memorandum of Association to reflect the new capital structure.
Also at the gathering, shareholders will consider and, if deemed fit, approve the company’s audited financial statements for the year ended December 31, 2025, alongside the reports of the directors, auditors, board evaluation consultants, and audit committee.
The meeting will also deliberate on the declaration of a final dividend and the re-election of three non-executive directors retiring by rotation, who are Mr Umaru Kwairanga, Mrs Ojinika Olaghere, and Dr Okechukwu Itanyi.
Other ordinary business items on the agenda include authorising the board to fix the remuneration of the external auditors, determining the remuneration of managers, and electing members of the statutory audit committee.
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