Takeovers in Africa up by a third

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London - The value of merger and acquisition (M&A) deals targeting sub-Saharan African firms jumped by almost a third last year to $30.3 billion (R330bn), while debt sales from the continent hit a record high, data from Thomson Reuters showed yesterday.

African companies are attracting increasing investor attention due to the spending power of the rising middle class on the fast-growing continent and expansion of its natural resources sector, which is drawing investment from China and other countries.

The data showed that the most targeted M&A country by value last year was Mozambique, due to three oil and gas sector deals with a total value of $9.3bn. South Africa, Nigeria, Tanzania and Angola were also in the top five.

South Africa and China were the most acquisitive nations, together accounting for 46 percent of purchases. Indian companies were also active in buying sub-Saharan African firms.

Most M&A deals were concentrated in the energy and materials sector, which accounted for more than $22bn in announced transactions, the data showed.

On the debt front, African borrowers came to market to take advantage of historically low yields and strong investor appetite, with countries such as Tanzania, Ghana and Rwanda marketing successful dollar bonds last year.

That trend is set to continue this year, with Kenya and Ivory Coast among those planning dollar bond issues. Sub-Saharan African debt issuance totalled $20.7bn last year, up 66 percent from 2012, with South Africa the most active issuing country, Thomson Reuters said. But equity and equity-linked issuance dropped 3 percent from 2012 levels, to $3.5bn.

Fees for sub-Saharan Africa investment banking services were down 2 percent to $354.5 million. - Reuters

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