Thomson Reuters, has released its Investment Banking Sub-Saharan Africa (SSA) region review for the first half of 2018. According to the review “two of the top three largest merger and acquisition M&A deals in the first half of 2018 took place in Nigeria with the largest being Milost Global Inc. $1.1 billion leveraged buyout transaction to acquire the entire share capital of Primewaterview Holdings Nigeria Ltd”.
It said that “South Africa’s overseas acquisitions accounted for 74.9 per cent of SSA outbound M&A activity, while acquisitions by companies headquartered in Mauritius and Zimbabwe accounted for 21.9 per cent and 2.5 per cent respectively. The Ivory Coast continued to be the most active issuer nation in bond proceeds at $6.3 billion or 26.7 per cent of market activity, followed by South Africa and Angola.
The review further said “The most notable feature of the Sub-Saharan Africa Investment Banking fees verified in the first half of 2018 is that investment banking fees were 12 per cent less than the value recorded in the first half of 2017. This year, they only reached an estimated $241 million,” says Sneha Shah, Managing Director for Africa at Thomson Reuters.
She adds; “Fees from completed Mergers and Acquisitions (M&A) transactions totalled $33.7 million, a 60 per cent decrease year-on-year and the lowest first half since 2005. On the other hand, Equity Capital Markets (ECM) underwriting fees reached $71.2 million, the highest value since 2007.” Rand Merchant Bank’s (RMB) continues to lead the chart on most investment banking fees received this year in SSA with a total of US$27.4 million or a 11.4% total fee pool. RMB also leads completed M&A and Syndicated Loans fee rankings in H2 2018.
Standard Bank, also known as Stanbic, leads the Equity Capital Markets (ECM) underwriting fee ranking with a 25.1 per cent share of the market and CITI leads the Debt Capital Markets (DCM) underwriting fee ranking with a 15.7 per cent market share. In comparison, the total Sub-Saharan Africa fees from DCM underwriting fees accounted for 27 per cent of the overall SSA investment banking fee pool, the highest since 2003. Completed M&A and ECM generated 14 per cent and 30 per cent of the total fee pool, respectively, and Syndicated Lending fees accounted for 30 per cent.