A report by Refinitiv Sub Saharan Africa Investment Banking Review for Q1:2020 reveals that the value of Mergers and Acquisitions (M&A) hit $4.8B. However, the value is 48% less than the value recorded in the first quarter of 2019 and a four-year low.
The largest Sub-Saharan African deal of the quarter was announced at the beginning of January – MTN’s sale of its tower businesses in Uganda and Ghana to AT Sher Netherlands Cooperatief for US$523 million. Deals in the materials sector accounted for 39% of Sub-Saharan African target M&A activity as South Africa became the most targeted nation, followed by Uganda and Nigeria.
In addition, the number of deals declined 12% over the same period with March 2020 marking the lowest monthly M&A total since August 2009. Deals with a Sub-Saharan African target declined 74% by value to a seventeen-year low of US$1.7 billion, as domestic M&A within the region declined 86% from last year and the combined value of inbound M&A deals failed to pass the $1 billion mark.
JP Morgan holds the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement. The American firm worked on seven deals with a combined value of U$993.0 million during the first quarter of 2020.
Sub-Saharan African equity and equity-related issuance totaled US$727.8 million during the first quarter of 2020, 32% less than the value recorded during the same period last year and a three year low. One initial public offering was recorded during the period as a Malawian telecoms company, Airtel Malawi, raised US$28.7 million on the Malawi Stock Exchange in February.
Investment banking fees in Sub-Saharan Africa reached an estimated US$128.2 million during the first quarter of 2020, down 15% from last year’s strong start. Almost a quarter of fees was earned from government & agency deals in the period under review.
Nearly two-thirds of all fees were generated in South Africa. JP Morgan earned the most investment banking fees in the region during the first quarter of 2020, a total of US$17.9 million or a 13.9% share of the total fee pool.
Elsewhere, in the debt capital markets, the African Development Bank raised $3 billion in a “Fight Covid-19” social bond at the end of March to help alleviate the economic and social impact of the Coronavirus pandemic.
In the first quarter of 2020, sub-Saharan African debt issuance totaled US$8.9 billion up 44% from the value recorded during the same period in 2019. Ghana issued a US$3 billion Eurobond in February 2020.