Kenya records 50pc drop in value of Mergers & Acquisition

Kenya has recorded a 50 per cent drop in the value of c in the first half of this year after COVID-19 threw investors into a spin.

The latest data on Mergers & Acquisition shows there were 15 deals in half-year ending June this year valued at Ksh 13 billion between January and June this year.

The Competition Authority of Kenya further predicts increments in joint ventures in the coming months, especially in the aviation and e-commerce sectors.

Kenya has long been considered East Africa’s dominant investment hub, attracting some high-value Mergers & Acquisition in the last few years.

Twelve of the 15 deals in the first half of 2020 were cross border transactions.

Bujagali Energy Ltd’s Ksh 4 billion sale to Jubilee Holdings was the highest outbound cross-border transaction of the period, while commercial International Bank Egypt’s acquisition of Mayfair Bank for Ksh 3.5 billion was the top inbound cross border deal.

According to the Competition Authority of Kenya, for inbound cross border deals, the focus was on media and entertainment, with three deals, as well as the financials, retail, and materials sectors, recording two deals each.

There was one outbound transaction, which had the highest deal value of all cross-border deals.

CA says it expects mergers will increase where dominant firms acquire upcoming competitors more so in the digital economy.

The watchdog has so far processed about 45 Mergers & Acquisition deals in the current financial year that ends on June 30 and said the number is expected to remain the same in the next financial year.

In the Sub-Saharan Africa region, mergers volume decreased 24% to 254 deals, compared to 338 deals for the same period last year.

The total value of M&A deals was down 56% to USD 6.8 billion in the first half of 2020, compared to USD 15.3 billion in H1 2019.

The majority of deals in the first half of this year were cross border, with 160 transactions totalling USD 4.8 billion.

  

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