In­vestors look off­shore

Business Day - Business Law and Tax Review - - BUSI­NESS LAW & TAX RE­VIEW -

The much-an­tic­i­pated con­sol­i­da­tions in the min­ing and telecom­mu­ni­ca­tions sec­tors;

The strength­en­ing of the re­la­tion­ship be­tween China and SA (fol­low­ing the Sum­mit of the Fo­rum on Chi­naAfrica Co-op­er­a­tion in Jo­han­nes­burg in De­cem­ber), which ought to re­sult in fur­ther in­bound merg­ers and ac­qui­si­tions ac­tiv­ity from China and Hong Kong into our re­gion; and

The in­creased in­volve­ment of In­dian cor­po­rates in busi­ness on the African con­ti­nent.

“Other sec­tors where we ex­pect some merg­ers and ac­qui­si­tions ac­tiv­ity dur­ing 2016 are agribusi­ness, re­new­able en­ergy and food and bev­er­ages,” Mr Pre­to­rius said.

“Ad­di­tion­ally, the size of the pro­posed AB In­bev/SAB Miller merger and the re­sul­tant re­struc­tures, re­or­gan­i­sa­tions and dis­pos­als which may re­sult from this trans­ac­tion should be taken into ac­count in any as­sess­ment of the an­tic­i­pated trans­ac­tional ac­tiv­ity for this year.”

Willem Ja­cobs, na­tional prac­tice head of the cor­po­rate and com­mer­cial prac­tice at Cliffe Dekker Hofmeyr, says SA’s slow econ­omy is forc­ing com­pa­nies to look at off­shore ex­pan­sion to achieve higher lev­els of growth.

Deepa Val­labh, head of cross-bor­der merg­ers and ac­qui­si­tions, Africa and Asia, at Cliffe Dekker Hofmeyr, agrees: “Sig­nif­i­cant op­por­tu­ni­ties ex­ist in 2016 for in­vest­ment into Africa, as con­tin­ued ur­ban­i­sa­tion and growth in pop­u­la­tions will drive de­mand in con­sumer sec­tors, par­tic­u­larly in real es­tate, food and health­care. Chal­lenges in terms of find­ing the bal­ance be­tween in­vestor as­pi­ra­tions and po­lit­i­cal and pol­icy con­sid­er­a­tions will form key con­sid­er­a­tions in terms of struc­tur­ing in­vest­ments into the con­ti­nent.”

We have noted be­fore in this pub­li­ca­tion that the ex­pan­sion of ma­jor law firms into Africa is go­ing to be a ma­jor trend to watch. This trend con­tin­ues to gather pace, with the move­ment among firms re­main­ing highly com­pet­i­tive.

In De­cem­ber ENSafrica an­nounced the launch of ENSafrica Ghana and from De­cem­ber 1 joined forces with Ghana­ian firm Ox­ford & Beau­mont Solic­i­tors.

Ac­cord­ing to ENSafrica, Ghana is one of the con­ti­nent’s fastest-grow­ing economies and is con­sid­ered a gate­way to the West African re­gion. It says Ghana of­fers a wide range of busi­ness and in­vest­ment op­por­tu­ni­ties and the coun­try has an abun­dance of agri­cul­tural, min­ing and hu­man re­sources, among oth­ers.

Some of the ma­jor in­ter­na­tional firms that are ex­pand­ing in Africa, such as Lin­klaters and Free­hills, are look­ing to in­crease their slice of the deal flow this year.

Other big firms such as Ho­gan Lovells and Baker & McKen­zie also want to break into the Africa top-deal ta­bles. It is in­dica­tive of the race for en­ergy, min­ing and con­sumer-based ex­pan­sion op­por­tu­ni­ties that con­tinue across the con­ti­nent.

Added to the sig­nif­i­cant rise in deal value, it all bodes well for a healthy 2016 in terms of deal flow, which will hope­fully pre­vent SA from fall­ing into re­ces­sion.

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