Home Business Anadarko, Pioneer Food Group, MultiChoice Group, top 2019 M&A deals—Refinitiv’s 2019 Investment Banking Report

Anadarko, Pioneer Food Group, MultiChoice Group, top 2019 M&A deals—Refinitiv’s 2019 Investment Banking Report

by Business News Report

Ruth Gabriel

Refinity has said that Investment Banking fees in Sub-Saharan Africa reached an estimated $555.6 million during 2019, up 3 per cent from 2018 and an annual total exceeded only twice since Refinitiv records began in the year 2000. According to its new report double digits were recorded across Merger and Acquisition transactions and syndicated lending fees. Advisory fees earned from completed M&A transactions generated $205.8 million, up 55 per cent from 2019 and eight year high for Sub-Saharan Africa. 

It said that syndicated lending fees increased by 14 per cent year-on-year to $246.8 million, the highest annual total recorded in the region since 2000. Equity capital markets underwriting fees declined 68 per cent to $28.9 million, the lowest level since 2002, while bond underwriting fees fell 26 per cent year-on-year to $74.2 million. Equity fees accounted for just 5 per cent of the overall Sub-Saharan African investment banking fee pool during 2019, the lowest share on record, while syndicated lending fees accounted for a record high of 44 per cent. M&A bond fees generated 37 per cent and 13 per cent, respectively.

“JP Morgan led the deals table in 2019. They earned the most investment banking fees for Sub-Saharan Africa during 2019 with a total of $48.5 million, which is an 8.7 per cent share of the total fee pool,” confirmed Franita Neuville, Investment and Advisory Performance Director for Middle East and Africa at Refinitiv Standard Bank Group followed closely with 8.6 per cent share of the total fee pool”, continued Neuville. Bolstered by Naspers’ $35.9 billion spin-off of its international empire of internet assets, the value of announced M&A transactions with any Sub-Saharan African involvement reached a record high of US$79.6 billion in 2019, 142 per cent more than the value recorded during 2018. Deals involving a Sub-Saharan African target increased 315 in value to $26.1 billion, what is now a four-year high. An $8.8 billion offer for Anadarko Petroleum’s African assets by French energy giant Total SA helped push inbound M&A, involving an acquiror from outside of the region, up 7 per cent year-on-year to $15.7 billion while intra-regional activity in Sub-Saharan Africa almost doubled to $10.4 billion. Outbound M&A increased 145 per cent to a three-year high of $12.5 billion. Deals in the energy and power sector accounted for 40 per cent of Sub-Saharan Africa target M&A activity during 2019.

“In terms of the most targeted nations in Sub-Saharan Africa during 2019, South Africa accounted for 81% of deals by value, followed by the Republic of Congo at 3.1% and Nigeria at 2.3%,” said Neuville. In terms of the financial advisor league table, Morgan Stanley topped the any Sub-Saharan African involvement announced M&A financial advisor league table during 2019 with 61% share of the market, followed by JP Morgan with 57%,” she added.

Sub-Saharan African equity and equity-related issuance totalled just $1.6 billion during 2019, 66 per cent less than the value recorded during 2018 and the lowest annual total in the region since 2005. Eighteen follow-up offerings totalled $1.5 billion and accounted for 95 per cent of the total equity capital market activity in the region by value, while three initial public offerings for the remaining 5 per cent. Mozambique’s Hidroelectrica de Cahora Bassa, a hydropower generation company, supplied the largest initial public offering in the during 2019, raising $53.7 million in July. ICON Properties raised 20.4 billion in January 2019, while Skyway Aviation Handling Co raised $6.2 million when it listed in Nigeria in April 2019. Standard Bank Group topped the Sub-Saharan Africa ECM league table during 2019 with 42 per cent share of the total market, followed by Investec with 19 per cent.

Sub-Saharan African debt issuance totalled $27.2 billion during 2019, down 19 per cent from the value recorded during 2018 and a three-year low. South Africa and Ivory Coast were the most active issuer nations with $7.1 billion and US$6.4 billion in bond proceeds, respectively. South Africa raised $5.0 billion with its largest Eurobond sale to date in September last year. JP Morgan took the top spot in the Sub-Saharan African bond ranking during the 2019 with $4.1 billion of related proceeds, or a 15 per cent market share. “We wait in anticipation to see what the Investment Banking activity will look like in 2020. With South Africa’s Exchange Traded Funds turning 20 this year, we certainly hope it will be a year of prosperity for the whole market,” Neuville concluded.

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