African consumers helping M&A growth Olga Lebedeva
The firm found that South Africa and Nigeria were the most appealing destinations for foreign investors whilst Egypt was also on the radar but had suffered a downturn since the unrest. The UK, France and China invested most in the region with the UK and France leading the way with deals in the region of $30 billion whilst China invested $20 billion.
The research revealed that foreign investors were targeting the metals and mining and oil and gas industries but that consumer facing industries such as telecoms, retail and food and drink were beginning to rival natural resources. According to Freshfields corporate partner Bruce Embley: ‘Extractives and mining opportunities have been big drivers of growth. However, consumer-related M&A could take the limelight as GDP per household continues to grow, the middle class in Africa expands and consumer demand rises.’ The firm revealed that the value of the African inward investment market had tripled in the last ten years, reaching more than $182 billion and that deal volumes had doubled, now standing at 2417.
Increased deal expenditure
Deal expenditure by non-African buyers increased by 71 per cent in 2012 despite a decline in global deal spend of seven per cent over the same period. The UK had led the foreign investor charge, investing the most since 200 and doubling its spending in Africa in 2012 compared with 2011.
According to the research by Freshfields, last year international investors were responsible for half the total value of African M&A, completing 255 deals worth $20 billion out of a total of 39.5 billion and 758 deals.