Corporate Deals In East Africa Rises To Sh113 Bn In Six Months

Corporate deals within East Africa have risen to 49 with the disclosed value estimated at Ksh 113.6 billion (USD 1.1 Bn) in just six months, this is largely driven by private equity, mergers, and acquisitions in Kenya.

Data released by I&M Burbidge Capital Ltd attributed the rise to increased deals mainly in the financial, energy, oil and gas, ICT, healthcare, manufacturing, and FMCG (Fast-moving consumer goods).

This reflects East Africa’s profile as a key investment destination, mainly for private equity investors backed by foreign capital.

“The total deal value and volume for the year-to-date (rose) to about USD1.1 billion (Ksh113.6 billion) and 49 deals respectively compared to USD603 million (Ksh62.3 billion) and 34 deals during the first half of 2018.

“The highest volume of deals in the year-to-date has been recorded in the financial services sector — 11 out of the 49 disclosed deals,” I&M Burbidge said in its financial review report.

Mergers and acquisitions deals had the highest amount of disclosed value which was USD 552.6 million (Ksh57 billion), the value was informed by the publicized information which was made as the firms sought approval.

Private equity deals took a large share of 33, nonetheless, the value of the PE deals remain undisclosed since they are often closed without the disclosure of the value of financial investment.

As at May 2019, eight major corporate transaction deals worth USD 80.2 million (Kshs 8.1 billion) was done in the East African region, up from 5 transactions in April.

Out of the eight, five deals involved Kenyan firms, in the 2017/18 financial year, Competition Authority of Kenya noted that it had received 148 merger notifications.

Some of the notable deals in the region include the acquisition of a majority stake in Nairobi-based hospitality chain Artcaffé Group by private equity fund Emerging Capital Partners (ECP) in a deal estimated to be worth $34.4 million.

In 2019, East African economies are projected to expand at an average rate of 6.1 per cent compared to a global average of 3.3 percent.

Featured Image Courtesy: Nairobi Business Monthly