DealMakers - 2021 Annual (February 2022)
by Marylou Greig
Deal activity returned to pre-COVID levels in 2021, with a flurry of announcements in the final quarter. The total number of deals – excluding the 11 failed deals – was 472, valued at R927bn.
Extracting those deals executed by companies with secondary listings on the JSE, local deal activity for the year was R484,6bn; a level not seen since 2015. The largest deal by a South African listed company (by value) was the acquisition by Vodacom of a 55% stake in Vodafone Egypt, valued at R41,6bn. The deal is a game changer for Vodacom as it seeks to diversify its revenue stream, and to rival MTN on the continent. The deal was unsurprisingly awarded the Brunswick Deal of the Year for 2021.
Drilling down, of the 472 deals announced in 2021, the real estate sector dominated, making up just under a third of all deals recorded by DealMakers, and valued at R93bn. This was followed by technology (16%) and financial services, mining and logistics (7%). Also unsurprisingly, the tech deals had the greatest aggregate value at R200bn (22% of the total value of deals for the year), despite many of the deals having an undisclosed value – this because no less than 18 involved private equity firms, and these parties are generally light on disclosure.
There were 33 scheme of arrangements announced, valued at R161bn, and this excludes the failed offer by IA Bell to Bell Equipment minorities and BHP’s offer to Noront Resources minority shareholders, valued at R5,4bn. The largest scheme for 2021 (and a shortlisted nominee for the Brunswick Deal of the Year) was the proposed buyout by Heineken International of Distell, valued at R36,7bn, though this was just one leg of a complex three-way, cross border and multi-jurisdictional transaction.
A staggering 30 companies announced plans to delist from the JSE in 2021; this excludes the 10 companies that announced plans to do so in 2020 and terminated trading in 2021. Just five weeks into the new year and a further three companies have signalled their intention to leave the exchange, symptomatic of a faltering economy and persistent negative business sentiment, although there are several other factors at play, such as the consolidation of companies into larger listed corporations, and business failure due to conditions arising from the COVID-19 pandemic. However, a worrying element of this is the steady increase in capital outflows over the last few years.
On a positive note, we are once again able to hold the Ansarada DealMakers Annual Awards in person, albeit under restrictive conditions. The Independent Panel, who give generously of their time, and who had the unenviable task of selecting the gold medal winners for 2021, had a good selection of complex transactions from which to draw.
As we slowly return to some sort of normality, both in business and in our personal lives, we are all changed in some way, and while things will never be the same, we are mindful of all we have, and of what has been achieved over the ‘lost’ two years. My grateful thanks go to the Oval Table member firms, the Annual Awards sponsors and to the industry for their unfailing support in the most difficult of times.