Investment banking Fees for Sub Saharan African Investment Banking services totalled US$339 million in 2014 ? The value of announced M&A transactions involving Sub Saharan African targets reached US$28 billion in 2014 ? Sub Saharan African debt issuance reached US$18.7 billion in 2014
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today released the annual investment banking analysis for the Sub Saharan Africa region.
According to estimates from Thomson Reuters / Freeman Consulting, fees for Investment Banking services in Sub Saharan Africa totalled US$338.9 million in 2014, down 9% compared to 2013 (US$371.2 mil).
Keith Nichols, Managing Director, Africa, Thomson Reuters, said: “The value of announced M&A transactions involving Sub Saharan African targets reached US$28.0 billion during 2014, down 3% from last year. Equity and equity-linked issuance in Sub Saharan Africa totalled US$6.7 billion in 2014, almost double the value recorded during 2013 (US$3.5 billion) and the highest annual total since 2007.”
He added: “Sub Saharan African debt issuance reached US$18.7 billion during 2014, 10% less than in 2013, although still the second highest annual total since our records began in the 1970s.”
In respect to investment banking fees, two-thirds of 2014 annual fees were earned during the second half of the year. Fees from equity capital markets underwriting increased 22% year-on year to reach US$112.4 million, marking the highest annual total in the region since 2010. Syndicated lending fees also increased from 2013, growing 8% to US$123.7 million and marking the highest annual total since our records began in 2000.
Fees from advisory on completed M&A transactions fell 22% to US$64.2 million, accounting for 37% of the annual fee pool, while debt capital markets underwriting fees fell 53% to US$38.6 million. Citi topped the Sub Saharan African fee league table during 2014 with a 9% cut of the fees. Standard Bank Group and Barclays followed in second and third positions, respectively.
As for Mergers & Acquisitions (M&A), the most targeted nation by value was South Africa, accounting for 52% of activity, followed by Nigeria (21%) and Mozambique (4%). South Africa was also the most active buyer in the region, while the United Kingdom was the most active foreign buyer.
Steinhoff International Holdings agreed to buy South African clothing retailer Pepkor for US$5.6 billion in November 2014. The deal involved the purchase of a 52.5% stake from Titan Premier Investments and a 39.9% stake from Brait Mauritius Ltd. It is the largest deal in the region since Bharti Airtel’s US$10.7 billion purchase of Zain’s African assets in 2010. Boosted by this deal, Retail was the most active sector in 2014, accounting for 21% of M&A activity.
Barclays topped the 2014 announced any Sub Saharan African involvement M&A Ranking, with US$7.3 billion.
As for Equity Capital Markets (ECM), proceeds raised from follow-on offerings accounted for 69% of ECM activity, while initial public offerings and equity-linked issuance accounted for 19% and 12%, respectively. 85% of deals involved a South African issuer. The financial sector was the most active sector for equity issuance in the region, followed by retail. The largest IPO so far this year was oil company Seplat Ltd’s US$541 million dual listing on the London and Nigerian Stock Exchanges in April. Citi took the top spot in the Sub Saharan African Equity Capital Markets league table during 2014, with 15% of the market.
The Debt Capital Markets were active as well. The African Development Bank, headquartered in the Ivory Coast, raised US$4.2 billion during the course of the year, accounting for over one-fifth of 2014 bond issuance in the region. The Kenyan government raised US$2.0 billion in June, the largest bond issued in the region so far this year, followed by a further US$1.9 billion in November.
Barclays took the top spot in the Sub Saharan African Debt ranking in 2014 with US$2.9 billion, or a 15% share. Deutsche Bank and Citi followed in second and third positions.
Article credit: http://www.fanews.co.za/article/investments/8/general/1133/sub-saharan-african-equity-issuance-doubles-to-us-6-7-billion-in-2014/17269