The value of announced mergers and acquisitions (M&A) transactions involving sub-Saharan Africa during the first half of this year has reached $18.1-billion – the highest first-half level since 2013.
Thomson Reuters’ quarterly investment banking analysis for the sub-Saharan Africa region found that inbound M&A activity during the first six months of the year rose to a four-year high of $10-billion, with investments led by the US, the UK and China.
Outbound M&A investments, however, declined 39% to $1.8-billion during the first half of the year, said Thomson Reuters Africa MD Sneha Shah.
During the half-year under review, domestic and inter sub-Saharan African M&A totalled $3.7-billion, up 38% year-on-year.
“South Africa’s overseas acquisitions accounted for 71.9% of sub-Saharan African outbound M&A activity, while acquisitions by companies headquartered in Mauritius and Seychelles accounted for 17.8% and 10.3% respectively,” Shah said.
Meanwhile, the report showed that investment banking fees in sub-Saharan Africa increased 12% during the first half of the year to $244.7-million.
“Fees from completed M&A transactions totalled $71.4-million, a 1% increase year-on-year, while equity capital markets underwriting fees rose 32% to a ten-year high of $71-million,” the report pointed out.
Syndicated lending fees declined 60% year-on-year to $33-million, while debt capital markets underwriting fees increased from $13-million in the first half of 2016 to $69.2-million during the six months under review.
“Debt capital market underwriting fees accounted for 28% of the overall sub-Saharan African investment banking fee pool, the highest first-half share since 2003,” said Shah.
Both completed M&A and equity capital markets generated 29% of the total fee pool, while syndicated lending fees accounted for 13%.