SA leads region in offshore deals

South African companies poured $5.1bn into offshore deals in 2017, accounting for 65.6% of sub-Saharan Africa’s outbound mergers and acquisitions (M&A) activity, according to Thomson Reuters data.

This was more than double that of its closest competitor, Mauritius. Companies headquartered there accounted for 31.7% of the region’s M&A activity, Thomson Reuters reported in an investment banking analysis released on Tuesday.

South African firms have increasingly pursued opportunities offshore as a stagnant economy and policy uncertainty hurt local growth prospects.

Prominent deals in 2017 included First Rand’s R19.4bn acquisition of UK bank Aldermore; Vodacom’s purchase of a 35% stake in Kenya’s Safaricom for R36.7bn; and Sibanye Gold’s acquisition of Stillwater Mining Company for R29bn.

Despite this heightened activity, outbound M&A activity in sub-Saharan Africa declined 44% to $7.8bn. Inbound M&A, meanwhile, reached a threeyear low of $14.4bn, with the US, the UK and Switzerland leading inbound investments.

The value of announced M&A transactions with any sub Saharan African involvement hit a five-year low of $32.4bn.

Sub-Saharan African debt issuance, on the other hand, raised $28.5bn, up 27% from the same period in 2016. Ivory Coast was the most active issuer nation, accounting for 36% of market activity, followed by SA and Nigeria.

Equity and equity-related issuance reached $9.6bn, up 11% from 2016. The Barclays Africa sell-down, Steinhoff Africa Retail’s initial public offering and capital raises by Sibanye Gold and Vodacom drove this.

Notwithstanding weak M&A activity, investment banking fees remained buoyant, reaching about $527.9m, just 0.1% below the 2016 figure.

With an 8.3% share of the total, Citi earned the most investment banking fees. Goldman Sachs topped the financial adviser league table, with a 15.1% share of the market.