Refinitiv released the first quarter of 2021 investment banking analysis for Sub-Saharan Africa. According to the report titled “Sub-Saharan African Investment Banking Review”, The value of announced Mergers and Acquisition (M&A) transactions with any Sub-Saharan African involvement reached US$6.1 billion during the first three months of 2021, almost level with the value recorded during the same period in 2020, and a five-year low.
The Refinitiv Mergers & Acquisitions database tracks changes in economic ownership at the ultimate parent level in going business concerns. All deals involving the purchase of at least a 5% stake, or 3% with a value of at least US$1 million are tracked, subject to criteria.
The number of deals declined 14% over the same period to the lowest first-quarter tally since 2014. M&A involving a Sub-Saharan African target increased 73% year-on-year to US$4.3 billion during the first quarter of 2021.
Domestic deals increased 67% from last year to US$2.5 billion, while inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 83% to US$1.8 billion. Meanwhile, Sub-Saharan African outbound M&A totalled US$721.4 million during the first quarter of 2021, down 66% year-on-year to the lowest first-quarter level in six years.
Refinitiv, an LSEG (London Stock Exchange Group) business, is one of the world’s largest providers of financial markets data and infrastructure
The Zambian Government, through its mining investment arm ZCCM Investment Holdings, acquired the Mopani Copper Mines for US$1.5 billion in January. The acquisition is the largest deal in the region to be announced so far during 2021.
With advisory work on deals worth a combined U$668.5 million, BofA Securities held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during Q1 2021.
INVESTMENT BANKING FEES
An estimated US$99.3 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2021, down 39% from the same period in 2020 and the lowest first-quarter total since 2014.
While debt capital markets underwriting fees doubled to US$47.1 million, the highest first-quarter total since our records began in 1980, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first quarter of 2020. Equity fees declined 42% to US$21.8 million, while syndicated lending fees declined 74% to US$15.0 million.
Advisory fees earned in the region from completed M&A transactions reached US$15.5 million, down 65% from last year to the lowest first-quarter total since 2005. Seventy-two percent of all Sub-Saharan African fees were generated in South Africa during the first quarter of 2021, and 39% were earned from deals in the financial sector.
B Riley Financial Inc. earned the most investment banking fees in the region during the first quarter of 2021, a total of US$19.8 million or a 20% share of the total fee pool.
EQUITY CAPITAL MARKETS
Sub-Saharan African equity and equity-related issuance reached just US$18.4 million during the first quarter of 2021, the lowest first-quarter total since 1999. Only Nigeria payments processing firm eTranzact raised new equity funds from its follow-on offering. There were no initial public offerings.
PAC Capital, Meristem Securities and Standard Bank Group share first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2021.
DEBT CAPITAL MARKETS
Sub-Saharan African debt issuance totalled US$12.1 billion during the first quarter of 2021, up 36% from the value recorded during the same period in 2020 and the highest first-quarter total since 2018. The number of issues declined 6% over the same period.
With Ghana’s government’s Eurobond raising US$2.9 billion and The African Development Bank’s $2.5 billion 5-year Benchmark bond, March 2021 saw more proceeds raised from bond issuance in Sub-Saharan Africa than any other month since May 2018, a total of US$7.4 billion. Government & Agency issuance accounted for 64% of proceeds raised during the first quarter of 2021.
Standard Chartered took the top spot in the Sub-Saharan African bond book-runner ranking during the first quarter of 2021, with US$1.4 billion of related proceeds, or an 11.5% market share.
