SA deals are fewer, smaller than 2011

Ethel Hazelhurst

Corporate deals in which South African companies are involved are down this year, according to Thomson Reuters. Figures from the information provider show only 130 mergers and acquisitions are in the pipeline in the year to date, worth $3.6 billion (R30.1bn). This compares with 147 transactions worth $10.2bn in the same period last year.

In the whole of 2011 corporate activity, involving 385 transactions, was worth $26.8bn, which was more than 3 percent lower than in 2010.

This year’s deals are much smaller in value than last year’s, when seven of the transactions were worth over $1bn. The biggest was Anglo American’s $5.1bn purchase of the 40 percent of De Beers owned by the Oppenheimer family.

So far this year, deals have been well below the $1bn mark. The largest is the pending purchase of the Scaw Metals Group, a Johannesburg-based manufacturer and wholesaler of steel products, from Anglo American for $437.2 million.

The offer was made by an investor group, backed by the Industrial Development Corporation, Izingwe Holdings, Shanduka Resources and the South Palace Group of Companies.

Thomson Reuters said that Anglo American had been seeking a buyer for its subsidiary since 2009.

The pending acquisition of Optimum Coal Holdings is valued at $406m. An investor group, made up of Piruto BV – a unit of Glencore International – and Cyril Ramaphosa’s Lexshell 849 Investments wants to acquire the remaining 32.23 percent stake.

Optimum is one of the largest producers of thermal coal in South Africa.

Next in value – at $394.4m – is the acquisition by Farmondi, a unit of Mondi Plc, of the remaining 34 percent stake in Mondi Swiecie.

Mondi Swiecie, a manufacturer of packaging materials, is based in Swicie in Poland and is a unit of Mondi Limited’s majority owned subsidiary Farmondi.

Mondi is an international paper and packaging group, with production across 28 countries. Key operations are located in central Europe, Russia and South Africa.

The company has a primary listing on the JSE and a premium listing on the London Stock Exchange.

Anglo Gold Ashanti has agreed to acquire First Uranium for $335m. The latter is a wholly owned subsidiary of Toronto-based First Uranium Corporation and the owner of Mine Waste Solutions, a recently commissioned tailings retreatment operation located in South Africa.

Another six deals on the top 10 list range in value from $86.3bn to $232.2bn.