DealMakers - Q3 2022 (released November 2022)
by Marylou Greig
There is no doubt that 2022 has been a difficult year globally. In South Africa, rising inflation hit a 13-year high, ending a period of cheap financing, and unemployment and energy prices are both on an upward trajectory, making an unfriendly bedfellow of the economy. The OECD has downgraded SA’s GDP outlook for 2022 and 2023 to 1.7% and 1.1% respectively, this against 3% growth expected in the global economy, slowing to 2.2% next year.
Looking at the dry numbers against 2021, there is a noticeable slowdown, although this is not a fair comparison as the level of deal activity in 2021 (at levels last seen in 2015) was brought on by the bottleneck and backlog of deals due to the COVID pandemic. In the year to end-September, DealMakers recorded 257 deals by exchange-listed companies, valued at R475,8bn (pg4). The real estate sector dominated the deal activity (30%), followed by resources (12%) and technology (11%).
Many companies expanded outside local borders, in search of higher growth opportunities. This was particularly true of local exchange-listed companies, as seen in the ‘M&A in Numbers’ section (pg8) in this issue, which shows that of the cross-border deals recorded in the period, 50% were focused either on deeper expansion into the rest of Africa, or beyond in the UK. Despite economic headwinds, M&A advisers believe that many factors remain conducive to sustained levels of corporate activity across various industry sectors, and deal pipelines are full.
Interestingly, bearing in mind that DealMakers also tracks the M&A activity of foreign companies with secondary listings on the JSE, for the first time in a while, the top three largest deals by value for the period involve SA-domiciled companies: Gold Fields acquisition of Yamana Gold (which appears in jeopardy with a competitive bid now in play), Remgro’s joint acquisition of Mediclinic International, and the Sanlam joint venture with Alliance of their African assets (pg6).
In this issue of DealMakers , we carry a feature on developments in the renewable energy sector as South Africa navigates the just transition. Articles carried give insightful information on this topical issue, and the “Meet the Specialists” section introduces some of those individuals who specialise in this area.
As we hurtle towards year end and the ‘silly season’, DealMakers is once again gearing up on the planning of the Ansarada DealMakers Annual Awards, which will be held on 21 February 2023. The submission of nominations for the 2022 subjective awards will close on 25 November – the criteria for inclusion can be found on the DealMakers website.
The team at DealMakers wishes you all a safe and restful break over the festive season. Hope to see you all in February.