South Africa remained the most targeted country for investment in sub-Saharan Africa last year, a report released by Thomson Reuters showed yesterday.
About 48 percent of sub-Saharan African merger and acquisition (M&A) activity during 2012 involved a South African target. The next most targeted nation, Nigeria, came in well behind at 28 percent, followed by the Democratic Republic of Congo at 7.2 percent.
The value of M&A transactions involving sub-Saharan African targets increased by 18 percent year on year, reaching $25 billion (R222bn) at the end of 2012.
This was even though the latest M&A report from Zephyr showed that the value of global M&A deals was at a five-year low in 2012, having declined by 7 percent to $3.144 trillion.
The Thomson Reuters report showed that South Africa was not only the most targeted destination for M&As, but it was also the most acquisitive nation, accounting for 39 percent of M&As in the sub-Saharan African region, overtaking the UK, which accounted for 22 percent of deals.
Most of the M&A transactions were concluded in the materials and the energy and power sectors.
The two accounted for 63 percent of activity in 2012.
Multinational investment bank RBC Capital Markets, which is part of Royal Bank of Canada, topped the 2012 sub-Saharan African M&A involvement with $2.9bn of announced deals, while US securities firm Goldman Sachs took second place with $2.5bn.
At the same time the investment banking fees in sub-Saharan Africa dipped 27 percent and stood at $307.9 million compared with $421m in 2011.
Equity capital markets issuance was also down 15 percent at $4.8bn. This marked the slowest year for sub-Saharan African equity capital market activity since 2005.
South Africa was again the most active nation in the equity capital markets during 2012, and financials was the most active sector. Morgan Stanley topped the 2012 sub-Saharan African equity capital market ranking a 22 percent share.
The 29 issues recorded in the region’s debt issuance stood at $11.8bn during 2012, representing a 4 percent decline from 2011.
Thomson Reuters Africa’s managing director, Keith Nichols, said year-on-year fee declines were seen across all asset classes except for loans, where fees nearly doubled from the year before.
Fees from syndicated lending amounted to $83.8m during 2012, accounting for 27 percent of all sub-Saharan African investment banking fee pool. Fees from M&A advisory fell the most, at 60 percent, and reached $87.7m.
JPMorgan topped the sub-Saharan African fee rankings for 2012, with a 10.5 percent cut of the fees. Citi and Bank of America Merrill Lynch followed in second and third positions, respectively.