Standard Bank talks up "buoyant" 2016 African landscape for M&A

 
William Turvill
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There are more opportunities for M&A in Africa than ever before, according to Standard Bank

Africa’s landscape for mergers and acquisitions (M&A) is "buoyant” and there are more opportunities in the continent than ever before, according to South Africa-based Standard Bank.

“There has been an increase in M&A activity, especially in East and West Africa, as European multinationals search for opportunities to counter slowing growth at home," said the bank's head of global advisory Fradreck Shoko.

“We also expect further consolidation within the broader financial sector as industry players seek to comply with increased regulations and meet minimum capital requirements as well as improve efficiencies through economies of scale.”

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Standard Bank noted yesterday that emerging markets are susceptible to negative global economic developments and "investor sentiment".

This, it said, has increased uncertainty and risk aversion, encouraging global investors to look elsewhere and resulted in increased volatility and lower prices.

Shoko added: “We are very cognisant of and realistic about the challenges in Africa and particularly in South Africa as our home market.

“We have a good understanding of these markets and aim to help our clients in both bull and bear market environments.

“Even if we enter another period of crisis, we expect that companies would retain their core objective of investing for the long term. We would thus still expect a significant number of successful transactions.

"We want our clients to invest and pick the long term ‘winners’ when others are fearful.”

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The bank said $158bn (£111bn) worth of deals were announced in Africa last year, with the financial, fast moving consumer goods (FMCG) and telecommunication sectors particularly active.

This figure includes Anheuser-Busch InBev's $123bn acquisition of SABMiller, which has a large operation in Africa, Standard Bank said.

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