Overview of M&A activity
Over the last year, there has been increased activity in Nigeria as companies strive to recover from the effects of the covid-19 pandemic on the economy. Nigeria's deal value in the first half of 2021 increased by 267 per cent with a total value of US$1 billion and a volume increase of 17 per cent compared to the first half of 2020.2 Most M&A deals in Nigeria are acquisitions. In 2021, the tech startup space saw a lot of activity with successful funding rounds for various startup companies.
In October 2021, the retail sector was active with African Capital Alliance acquiring a 31 per cent equity stake in Food Concepts Plc from Development Partners International. Shoprite International also sold its equity stake in its Nigerian subsidiary valued at US$20 million. Africa Capital Works also acquired a major equity stake in Dorman Long Engineering Limited, an engineering and fabrication company.
The banking and financial services sector showed significant activity. Key transactions in this sector include the acquisition by Access Bank Group of a 78.15 per cent stake in the African Banking Corporation of Botswana Ltd. Other deals in this sector include the acquisition by FCMB Pensions of a 60 per cent stake in AIICO Pension Managers Ltd.
In the agriculture sector, Releaf Ltd, an agriculture technology startup, raised US$2.7 million in its seed fund round, led by Samurai Incubate Africa, Future Africa and Consonance Investment Managers. Agricorp International – a Nigerian based spices producing, processing and exporting company – also raised US$17.5 million in a Series A funding round from investors including AFEX Nigeria and One Capital LLC.
The telecommunications and entertainment sector saw one of the largest deals with Mwendo Holdings BV (South Africa)'s US$182 million acquisition of Blue Lake Ventures Ltd, a Nigerian media and entertainment company.3 Other deals include the acquisition by I-web Inc of a 100 per cent stake in Nigeria's Tingo Mobile Plc in August 2021.