M&A Roundup: M&A activity hotting up as 2019 gets underway

Competition Tribunal approves and disapproves some mergers while South African companies invest in Nigeria.

The value of mergers & acquisitions and number of deals concluded in South Africa have fallen off a cliff, going from $7.5 billion (2017) to $4.3 billion (2018), as Africa’s most industrialised economy continues to battle with slow economic growth. However, practitioners expect 2019 to be promising in terms of a rebound in deals. The Global Transaction Forecast indicates that the value of deal will rise to $6.2 billion in 2019 and the number of deals concluded is expected to climb to 199 in the same year. 

Read more: Part one: South Africa’s M&A activity value reaches $4.3 billion in 2018

Naspers’ classifieds business, OLX Group, has invested $1.16 billion to acquire a further 29.1 percent stake in Avito, which is the leading online general classifieds and property platform in Russia.

The investment means that OLX Group’s shareholding in Avito will increase from 70.4 percent to 99.6 percent on a fully diluted basis.

Read more: Naspers’ OLX Group invests $1.16 billion in Avito

Vedanta Resources has plans to invest $1.2 billion investment in its South African mining projects, targeting an annual production of zinc of two million tonnes across its global operations. As part of this target, it aims to expand its zinc operations in Africa. 

Read more: Vedanta Resources set to invest $1.2 billion in South Africa

A new report has indicated that Nigeria is increasingly on the radar of dealmakers, as the most populous country and fastest-growing economy in Africa has seen a rise in M&A activity of late. 

“Economic growth in Nigeria has recovered slowly in the last two years as a gradual increase in both oil prices and oil output have supported expansion, and dealmaking has followed suit,” said Morne van der Merwe (pictured), the head of corporate/M&A at Baker McKenzie in Johannesburg.

Read more: Part two: Nigeria mergers & acquisitions transactions on the rise

Tharisa will be embarking on a secondary listing of its shares on A2X Market exchange with effect from 6  February 2019. The company’s primary listing on the Johannesburg Stock Exchange (JSE), secondary standard listing on the main board of the London Stock Exchange (LSE) and issued share capital will be unaffected by the secondary listing on A2X.

Read more: Tharisa to list shares on South Africa’s A2X

Naspers and Dimension Data are in talks to sell their joint venture, Vast Networks, to fibre-optic infrastructure company Link Africa, according to a Bloomberg report. 

Read more: Link Africa said to be in talks to buy Vast Networks

South Africa’s Competition Tribunal has blocked the merger between Mediclinic Southern Africa and Matlosana Medical Health Services on grounds of lessening competition in the North West province, spoiling Matlosana Medical Health Services’ plans to expand into the province. 

Read more: South Africa’s Competition Tribunal blocks Mediclinic's hospital merger

Qatar Investment Authority plans to invest $200 million in Airtel Africa. The $200 million investment will be raised through an issue of Airtel Africa’s primary shares and the proceeds would be used to reduce the company’s debt.

Read more: Qatar Investment Authority plans to invest $200 million in Airtel Africa

The Coca-Cola Company has completed its acquisition of a 40 percent stake in Chi, a beverage company based in Nigeria, from Tropical General Investments Group. 

Read more: Coca-Cola completes acquisition of Nigerian juice company Chi

South Africa’s Competition Tribunal has unconditionally approved the acquisition of a 65 percent stake in Peregrine Securities by Nkholi Consolidated Investments. 

Read more: South Africa’s Competition Tribunal approves merger between Peregrine and Legae