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DealMakers - Q1 2024 (released May 2024)

Editor's Note

by Marylou Greig

At the time of going to print, South African citizens were counting down the weeks to the country’s seventh and, arguably, most crucial democratic national elections. The country stands on a precipice, both politically and economically. While political fatigue is a real thing, the importance of each vote is critical if the country’s trajectory is to be altered, and a return to its once-held position of economic prowess and choice as an attractive investment destination on the continent is to be achieved.

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Marylou Greig

On the sidelines, foreign and local capital are watching the elections carefully – it’s a delicate balance between risk aversion and strategic agility. If a hoped-for stable election outcome is realised, this – combined with easing interest rates and more certainty around energy security – would be very positive for local equities, which are undervalued, relative to their potential for growth and shareholder returns. A falter in dealmaking confidence could result in missed opportunities.

M&A activity by exchange-listed companies in the first quarter of 2024 got off to a slow start with only 55 deals announced, valued at R216,3 billion. Among these were several big ticket transactions, namely the bid by Canal+ to acquire Multichoice (R35bn), Telkom’s much-anticipated sale of its Swiftnet tower portfolio (6,8bn), and Sanlam’s acquisition of Assupol (R6,5bn). However, the total deal value (which compares with R31,8bn in the same period in 2023) is skewed by the now failed bid by Mondi plc to acquire UK competitor, DS Smith, valued at R122,8bn.

A feature of the capital market in Q1 was the spinoff of We Buy Cars to Transaction Capital shareholders and the subsequent listing of the entity on the JSE. New listings on the exchange remain slow; not helped, in part, by the unfavourable market dynamics. For its part, the JSE intends to split its main board into two – a Prime Segment and a General Segment – as part of efforts to streamline regulations by removing some of the red tape to better suit the needs of smaller firms. Several new listings have been touted for later this year.

PowerFleet took an inward secondary listing on the bourse after its acquisition of MiX Telematics minorities in October 2023, and A2X Markets welcomed two UK-based mining companies: Neo Energy Metals as its first inward secondary listing in February, followed by Marula Mining in April.

I am pleased to report that our DealMakers AFRICA Annual Awards, held for the first time in Lagos in March, were a great success, providing an opportunity to network and explore possibilities in West Africa with the region’s dealmakers. The Pathfinders initiative, our fifth such event, continues to connect young professionals within the industry. Take a look at these photographs, and those of the Ansarada DealMakers Annual Awards, which colour the pages within this issue.

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