Mergers and acquisitions (M&A) deal value increased in the first half of 2021 in South Africa and Nigeria, according to Baker McKenzie’s analysis of Refinitiv data, although the economic success could be threatened by unrest in South Africa.
Deal value rose in Nigeria in the first half of this year, and the value of deals in South Africa rocketed, contrasted with a slight fall in deal value and volume for Kenya in the same period, according to Baker McKenzie ’s analysis of data by Refinitiv .
South Africa’s deal value was USD 52 billion in the first half of 2021. When compared with the same period in 2020, the volume of transactions has suffered a fall of 8%, but deal value has risen by 958% in the first half of this year.
Baker McKenzie corporate partner Marc Yudaken said in a statement that “despite the excellent start to 2021, the unrest in South Africa threatens to impact the positive strides made in terms of foreign investment into the country in the first six months of this year”.
Yudaken continued: “For the sake of South Africa’s post-pandemic recovery, the turmoil engulfing our country has to be ended before investors are forced to seek less risky alternatives. Foreign investors will only ramp up their investments if they are confident their assets are safe. They need political and economic certainty and must have confidence that there is rule of law in the countries in which they invest.”
There were 12 inbound deals in South Africa involving technology companies, representing a 200% growth in deal volume year-on-year and a deal value increase of 1997% compared with the first half of 2020.
Referencing this trend, Baker McKenzie’s Johannesburg-based head of Africa Wildu du Plessis said: “It’s no secret that African consumers have shown a growing reliance on technology across multiple platforms, even well before the pandemic struck.”
He added: “The growth of the digital economy across the continent has naturally been accelerated by the pandemic and this unabated demand for technology has caused extensive cross-sector disruption, with the financial, energy, transport, retail, health and agricultural sectors all seeking opportunities to expand their tech infrastructure in order to acquire the necessary skills and innovation needed to keep up with demand.”
He noted that fintech is an area of rising popularity in the technology sector when it comes to investment in Africa “and specifically in South Africa, Kenya and Nigeria, with health-tech, mobility […]
