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M&A deal value set to increase in Nigeria

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Economic growth in Nigeria has recovered slowly in the last two years

….It is expected that deals worth around $2.9 bn will be concluded in 2019

TUE, FEBRUARY 05 2019-theG&BJournal-The Global Transactions Forecast (Forecast) issued by global law firm and specialist for cross-border transactions Baker McKenzie, and the independent global advisory firms Oxford Economics (OE), shows that Nigeria saw a rise in mergers and acquisitions (M&A) activity in 2018 and that further increases are expected in the years ahead.

“Economic growth in Nigeria has recovered slowly in the last two years as a gradual increase in both oil prices and oil output have supported expansion, and dealmaking has followed suit. M&A activity showed an improvement in 2018 from 2017, led by two major inbound acquisitions from the United States. And with better macroeconomic fundamentals for 2019, total M&A value is set to reach a cyclical peak at just below $3bn in total M&A,” says Morne van der Merwe, Head of Corporate/M&A at Baker McKenzie in Johannesburg.

According to the Global Transactions Forecast, M&A deals in Nigeria in 2017 amounted to $469.8 million, rising to $2.7 billion in 2018. In 2019, it is expected that deals worth around $2.9 bn will be concluded, dropping slightly to $2.5 bn in 2020. In 2021, M&A deal value in Nigeria is forecast to rise to around $3 bn. In terms of deal volume, there were 26 M&A deals in Nigeria in 2017, dropping to 23 in 2018. In 2019, 24 M&A deals are expected to be concluded in Nigeria, rising to 27 in 2020 and increasing again to 38 in 2021.

Nigeria IPOs

The Initial Public Offering (IPO) forecast shows domestic IPOs valued at $340.8 million are expected in Nigeria in 2019, $139.7 million are predicted in 2020 and $216.3 million in 2021.

Wildu Du Plessis, Head of Capital Markets at Baker McKenzie in Johannesburg, explains, “Political instability caused a big collapse in capital raising in Nigeria in recent years, but it’s good to see that Nigeria is recovering and that there is a return of predicted IPOs for 2019, 2020 and 2021. Hopefully this is the start of a long upswing in capital raising activity in the country.”

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