Top 5 Investment Deals in Africa 2013

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I-181-25In the past year, Africa continued to be a hive of business activity, when it came to mergers and acquisitions and deals involving sub-Saharan African companies reached $23.4 billion in the first nine months.

This was a staggering 80 percent surge from the previous comparable period, according to Thomson Reuters’ Sub-Saharan Africa Investment Banking Analysis.

The reason for this surge in investment deals is the fact that Africa continues to be seen as an attractive investment destination by foreign firms from all economic sectors.

Some of the biggest investment deals struck during the period involved PetroChina, Eni, Glencore, Xstrata Vivendi, Etisalat , Absa, Barclays Vodacom and Vodacom Tanzania.

PetroChina/Eni Deal

PetroChina’s $4.2 billion acquisition of ENI East Africa was concluded in March 2013.

Eni CEO, Paolo Scaroni and Zhou Jiping, the CEO of Petrochina, finally signed an agreement to this effect in Beijing later that month.

PetroChina is controlled by China National Petroleum Corporation (CNPC).

The two parties agreed that Eni will sell 28, 57 percent of its East African shares to PetroChina.

Eni East Africa owns 70 percent interest in Area 4, in Mozambique.

With this transaction, PetroChina acquired a 20 percent stake in Area 4, while Eni remained the 50 percent owner.

Glencore/Xstrata Deal

In May last year, global trading house, Glencore, finalised its multi-billion dollar merger with mining firm, Xstrata.

The New York Times described this deal as one of the biggest deals of its kind in recent years.

But the most interesting element of this deal was the fact that shortly after the finalisation, the merged group Glencore Xstrata, listed on the JSE’s main board in November last year.

The company said the listing deepened its relationship with South Africa and by extension Africa.

“It highlights our confidence in Africa as a place to invest. We welcome our new stakeholders and look forward to building long-term mutually beneficial relationships with them,” CEO Ivan Glasenberg, said at the time.

Vivendi/Etisalat/Maroc Telecom Deal

In November 2013, French-based conglomerate, Vivendi, agreed to dispose of its 53 percent stake in Morocco’s biggest telecoms firm, Maroc Telecom. The stake was sold to the UAE’s Etisalat for $5.7 billion.

It is understood that this deal gave Etisalat a market-leading operator status in Morocco, the stable North African country. The transaction would possibly be concluded early this year.

Absa/Barclays Deal

Late last year, South African lender, Absa, said African regulators had given it the go-ahead to buy Barclays’ African assets for more than R18 billion ($1.6bn in today’s exchange)

Absa, which is South Africa’s biggest retail bank, bought Barclays’ banking operations in Ghana, Kenya, Botswana, Tanzania, Uganda, Mauritius, Seychelles and Zambia.

It also bought South Africa-based Barclays’ Africa Regional Office. These businesses merged with Absa’s Africa operations.

The deal left out Barclays’ Zimbabwe and Egypt businesses.

“We have created one of the leading banking groups in Africa. Our goal is to assist in accelerating Africa’s true global potential and to become the go-to bank on the continent,” Absa CEO, Mario Ramos, said at the time.

The deal became effective at the end of July last year, with Barclays’ stake in Absa surging from 55.5 percent to 62.3 percent. The new business unit is now called the Barclays Africa Group and it is listed on the JSE under that name.

Vodacom/Vodacom Tanzania Deal

JSE-listed mobile phone operator, Vodacom,also acquired an additional 17, 2 percent stake in Vodacom Tanzania for R2.4 billion ($236.5m) in 2013.

Vodacom Tanzania is the east African country’s 14-year-old leading mobile phone business with 10 million mobile clients.

This acquisition increased Vodacom’s total economic interest in Vodacom Tanzania from 65 percent to 82, 2 percent, giving it total exposure to Tanzania, a high growth market in the region.

The deal will also permit Vodacom to upturn its spotlight on one of its most important investments in sub-Saharan Africa.

Vodacom Tanzania has been Vodacom’s most prosperous investment outside Vodacom’s home base of South Africa. It has a mobile customer base of 10 million.

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