DealMakers - Q3 2021 (November 2021)
by Marylou Greig
With the local elections behind us, albeit with a low voter turnout, focus can once again return to the business of getting back to ‘normal’, and while life is unlikely to be so again, South Africans are good at making the best of the situation at hand.
Analysis of local deal activity for the year to end-September 2021 speaks to this point. Advisers in the M&A space have been busy.
The total value of deals recorded by SA exchange-listed companies for this period was a whopping R559,3bn from 332 deals. That compares with R195,2bn (284 deals) over the same period in 2020 (unsurprising) and R346,39bn (369 deals) in 2019. In fact, this year’s total deal value for the period is the highest since DealMakers started doing the comparison in 2009. Breaking the deals down into value categories (pg 10), it is interesting to note that 57 of the deals each have a value of R1bn plus, representing 92,3% of the total deal value for the period.
An analysis of the target sectors shows real estate (91 deals), technology (49) and financial services (29) as the most active.
Of the 332 deals announced (three have since failed), 289 of these involved companies with primary listings on one of the local exchanges. Of these, 81 were cross border deals executed by SA domiciled companies, with the top regions being Africa (29), where the targets were primarily energy, mining and logistics, followed by Europe and the UK (each with 20 deals), with property the main focus.
The top three local deals by value for the period were the sale by Northam Platinum of a 26,5% stake to a BEE consortium (R33,1bn); the buyout by DP World Logistics of Imperial Logistics (12,95bn); and the acquisition by Standard Bank of the remaining stake in Liberty (10,71bn).
Repurchases continued to dominate activity in the equity capital markets, with the likes of Anglo, Quilter and Prosus, as well as many of the smaller companies returning value to shareholders.
In this issue of DealMakers, we carry a feature on ESG in dealmaking and financial markets. With ESG factors becoming increasingly important in the assessment and valuation of potential merger and acquisition opportunities, ignoring ESG is no longer an option for companies, and is now considered a risk factor alongside reputational risk. Articles carried in this feature give insightful information on this topical issue and the section titled, “Meet the Specialists” introduces some of those individuals who have made ESG their passion.
It is that time of the year again when DealMakers gears up on the planning of the Ansarada DealMakers Annual Awards, which will be held on February 22, 2022. It is our hope that we will hold a physical event once again, even if on a smaller scale. The submission of nominations for the 2021 subjective awards will close on November 26.
DealMakers wishes you all a safe and restful break over the festive season. Hope to see you all in February.