In the fourth quarter of 2015, Mergermarket interviewed 100 investors and advisers who are based in Africa and have been involved in deals on the continent within the past two years – including corporate executives, private equity investors, legal advisers and investment bankers – about their experience in the M&A market and their expectations for the year ahead. All responses are anonymous and results are presented in aggregate.
As global M&A reaches record highs, dealmaking confidence is spilling over into Africa. Propped up by cash-rich international buyers and steadily increasing volumes of inter-African M&A, survey respondents are enthusiastic about deal flow on the continent.
All survey respondents believe deal volumes will increase as investors turn to the continent to find growth. Indeed, 42% anticipate that M&A activity will increase greatly in the year ahead. “The amount of investments in the region have increased and many companies are taking advantage of the availability of capital and the improving business conditions to carry out deals in the region. This will only increase in the coming year and we expect it to risein a big way,” says an Algeria-based director of finance. The dealmakers polled also note that consolidation opportunities across a number of industries and the attractive pricing of high-quality targets will also spur M&A in Africa. “M&A activity will increase greatly as several sectors are ripe for consolidation and the level of growth and opportunity outweighs the risks, given the size and potential of the market,” says a corporate group chief financial officer from South Africa.