$183bn of M&A in Africa in last 10 years, Britain leads

The total value of mergers and acquisitions deals in Africa by foreign investors was $183 billion over the ten years 2003-2012, up threefold on the previous decade, according to a story this week on Reuters. There were a total of 2,417 transactions, double the previous decade (up 109%). Britain was the largest investor with 437 deals worth $30.5bn.
The information is available in figures compiled by Freshfields Bruckhaus Deringer, an international law firm. Other major investors were France (141 deals worth $30.47bn) and China (49 deals worth $20.8bn). South Africa is the most active African investor in the continent outside of its domestic market and invested $6.2bn across 153 deals.
According to the Freshfields Bruckhaus Deringer press release: “International investors now account for half of the total value of African M&A, completing 255 deals worth $20.0bn out of a total of $39.5bn and 758 deals in 2012. This is up from $6.4bn and 122 deals in 2003.”
Most of the M&A action was in metals and mining, with 752 deals worth $33.9bn, followed by oil and gas (299 deals worth $29.6bn) and wireless telecoms (33 deals worth $25.4bn). Reuters quotes Bruce Embley, corporate partner at the law firm, who says the emphasis could be changing: “Extractives and mining opportunities have been big drivers of growth. However, consumer-related M&A could take the limelight as GDP per household continues to grow, the middle class in Africa expands and consumer demand rises.”
According to the press release: “Consumer-facing industries such as telecoms, retail and food and drink are beginning to rival natural resources with $58.0bn invested across 569 deals. The value of investment targeting consumer industries has doubled in the last ten years with $3.8bn across 71 deals invested in 2012 (up from $1.9bn and 33 deals in 2003).”
Top deal destinations over 2003-2012 were South Africa ($59.1bn of investment over 836 deals), Egypt ($46.5bn for 266 deals) and Nigeria ($22.1bn across 90 deals).
China overtook the USA as Africa’s largest trading partner in 2009, according to a U.S. Government Accountability Office report released in February. African economic growth is forecast at 4.8% in 2013 and 5.3% in 2014, according to the African Economic Outlook 2013 report released on 27 May. The growth will be fuelled by commodity exporters such as Nigeria, Ghana and Cote d’Ivoire, all in West Africa. The annual AEO report is produced the African Development Bank (AfDB), the OECD Development Centre, the Economic Commission for Africa (ECA) and the UN Development Programme (UNDP).

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