Top African Mergers and Acquisitions in 2018

In the history of global business, almost every year closes with some kind of deal, be it investment, merger or acquisition and these deals are often huge, going in excess of millions or billions of dollars. The African business space in 2018 was not an exception as the year ended with a number of Mergers and Acquisitions (M&As).

According to Thomson Reuters’s data for Africa, the total deal volumes and values of M&A transactions in Africa fell sharply in the third quarter (Q3) of 2018, declining 48.9 percent in deal volume compared to the same period in 2017.  The report notes the deals announced were 522 deals valued at $17.94 billion in the Q3 of 2017. This dropped to 343 deals valued at $9.17 billion in Q3 of 2018. While the deals completed in Q3 2017 were 328 deals valued at $15.8 billion, this dropped to 208 deals valued at $5.02 billion in Q3 of 2018.

The reason for this decline is unknown as Africa has had a lot of political and business uncertainties. Some industry experts have also blamed bad governance and corruption as the reason for the decline as countries like the United Kingdom and the United States have made investors more cautious about investing in Africa.

Below are some of the top mergers and acquisitions across in Africa in 2018

TPG Growth and TRACE

In January 2018, United States-based private equity firm TPG Growth acquired a majority stake in the South African multimedia entertainment company TRACE.

TRACE is a multi-platform media company with over 200 million viewers and listeners across 160 countries. It is a leading youth brand across Sub-Saharan Africa and operates 30 digital and mobile services, 21 pay TV channels and seven radio stations.

TPG Growth acquired the stake from trade buyer Millennium Technology Group (MTG), which initially invested in 2014. The acquisition is TPG’s fifth Africa investment after backing Gro Intelligence, a global agricultural data business, Frontier Car Group, which manages Cars45.com and Ecoles Yassamine, a private school network in Morocco.

Zinox and Konga

In February 2018,  Zinox, which owns Africa’s first composite e-commerce company Yudala acquired Nigeria’s largest online mall, Konga. The official merger which will see both companies leverage on the strength that they have built over the years was announced in April. The merger is a landmark in the history of e-commerce business in Nigeria and across Africa. Through the acquisition, Zinox now owns 99 percent of Konga, including all of Konga’s e-commerce domain, Konga.com, logistics unit KOS Express and digital payment solution KongaPay.

Samsung acquired Egyptian startup Kngine

In March 2018, South Korea-based Samsung announced the acquisition of Egyptian artificial intelligence startup Kngine in order to improve its virtual assistant Bixby, developed by Samsung Electronics.

This acquisition is considered a big one for Kngine. It is worthy to note that before executing the full acquisition of the company, Samsung had invested in Kngine through their venture capital unit, Samsung Next, jointly with Vodafone Ventures in 2014.

Swiss Re acquired Britam

In June 2018, Global reinsurance giant Swiss Re acquired a 13.81 percent stake in Kenya’s largest company in the life insurance and pension annuity sector, Britam Holdings.

According to the announcement, Swiss Re acquired 348,504,000 ordinary shares in Britam from one of its key shareholder, Peter Munga. Britam’s property portfolio includes hospitality, housing, offices, shopping malls and student accommodation. Britam is operational in Mozambique, Malawi, Rwanda, South Sudan, Tanzania and Uganda.

Swiss Re already has a foothold in Kenya, where it bought a 26.9 percent minority stake in another insurer, Apollo Investments Limited.

Allianz Group acquired Ensure Insurance Plc

FILE PHOTO: The logo of insurer Allianz SE is seen on the company tower at La Defense business and financial district in Courbevoie near Paris, France, March 2, 2016. REUTERS/Jacky Naegelen/File Photo

Allianz Group in July announced that it has signed a binding agreement to acquire 98 percent of Nigerian insurer Ensure Insurance Plc. from its core shareholder Greenoaks Global Holdings Ltd.(GGH).

Ensure Insurance Plc. offers life and non-life insurance services and generated €11 million in gross premiums in 2016.

MTN and Simfy Africa

In order to have a music streaming service in Africa, Africa’s biggest telecom company, MTN in November 2018 announced that it has bought music-streaming business Simfy. Simfy which was officially launched in South Africa in August 2012 has access to more than 42 million tracks and has signed deals with most of the major record labels in the country.

According to MTN Group’s CEO, Rob Shuter, Simfy would run as a separate business, with a separate team and it is not going to be MTN branded.

Emergent Technology Holdings acquired InterpayAfrica

Global Fintech company, Emergent Technology Holdings LP (“EmTech”), announced in December that it has acquired a payments processor based in Ghana, Interpay Limited (“Interpay Africa”).

The acquisition extends the operations of EmTech’s digital payments business, Emergent Payments, a local payments provider in 70 emerging markets. Interpay Africa connects African merchants to local and international payments capabilities across mobile money, traditional payment and local bank platforms. Interpay Limited has been renamed Emergent Payments Ghana Limited and will do business as Emergent Payments Africa.

Access bank acquired Diamond Bank

Access Bank

Access Bank Plc in December announced that it has merged with another lender Diamond Bank Plc. The merger will position Access Bank as the biggest lender by assets in Nigeria.

The Managing Director and Chief Executive Officer of Diamond Bank opted for the acquisition by Access Bank despite an offer of a capital injection by key shareholder Carlyle Group’s Carlyle Sub-Saharan Africa Fund (CSSAF) DBN Holdings.