Mergers & Acquisition

A merger and acquisition (M&A) is a transaction where two or more businesses combine their assets or operations to create a new entity: The goal of an M&A is to create a more efficient and effective company than the original two. M&As can be beneficial for the owners of both the original companies and the new entity. For example, some shareholders may receive cash for their shares, while others may keep their shares and profit from higher dividends. M&A deals can be friendly or hostile, depending on the approval of the target company's board. Mergers and acquisitions can be time-consuming, and some can take years to complete. The size of the businesses involved and the urgency of the acquiring company can impact the timeframe. Companies may choose to merge or acquire other companies to increase revenue, lower costs, grow market share, or acquire new product lines 

November Mergers & Acquisition News 

Global M&A Market Sees $30.1 Billion in Deals from November 18-24, 69% 

Driven by 11 Major Transactions From November 18 to November 24, the global mergers and acquisitions (M&A) market saw 611 transactions, with a combined value of USD 30.10 billion. Of these, 11 deals surpassed USD 500 million, contributing USD 20.75 billion, or 69%, of the total deal value for the week. For more details, click here. 

More than half of banks may face mergers or acquisitions following the CBK's review of regulations. 

Proposed changes in the recently published Business Laws (Amendment) Act (Access here) aim to raise the minimum core capital requirement for banks from Sh1 billion to Sh10 billion by 2027. This increase would primarily impact tier two and tier three banks. Industry insiders and analysts have warned that the higher capital requirements could put significant pressure on smaller banks. Struggling to attract new investments or retain earnings in the face of financial challenges, many of these banks may find themselves unable to meet the new thresholds. This could lead to a wave of mergers and acquisitions, as smaller banks seek partnerships or larger institutions look to consolidate their positions. The changes could ultimately reshape the banking landscape, reducing competition and limiting options for customers. For more details, click here 

Blocked Vodacom merger disrupts South African telecoms' M&A ambitions. 

Analysts have warned that the Competition Tribunal's decision to block a merger between Vodacom and major fibre operator Maziv could hinder South African telecom companies' efforts to accelerate digital infrastructure expansion through large mergers and acquisitions. The ruling, which prevented Vodacom from acquiring a 30% stake in Maziv, may push firms to either build their own networks or seek smaller, less contentious partnerships. This could lead to significant delays in much-needed investments, potentially extending the timeline by years. For more details, click here. 

Google's deal with Anthropic is at risk as the U.S. Justice Department moves to challenge the company's online search monopoly. 

Regulators are seeking to block Google’s $2 billion investment in Anthropic, an AI competitor backed by Jeff Bezos and rival to OpenAI. In a court filing on Wednesday, the U.S. Department of Justice (DOJ) recommended that Alphabet Inc.'s Google divest its Chrome browser to break up its monopoly on online search. The DOJ further argues that Google should be prohibited from making deals with companies controlling how consumers access search information, which includes AI products. This could jeopardize Google’s investment in Anthropic, according to Bloomberg, citing unnamed sources. For more details, click here. 

Additional Corporate 

According to an EIB report, female-led businesses in Sub-Saharan Africa are less likely to default on loans. The 2024 Finance in Africa report by the EIB reveals that 72% of banks in the region have a gender strategy, with an additional 17% planning to introduce one, reflecting trends from the 2023 survey. Two-thirds of banks offer financial services or products specifically aimed at women. The report also highlights a discrepancy in loan sizes, with 59% of banks reporting no difference between loans to men and women, while 38% note that loans to female-led businesses tend to be smaller than those to male-led firms. Additionally, banks continue to report better loan performance for female-led businesses, with nearly 70% observing lower rates of non-performing loans, emphasizing the benefits of lending to women. For more info, click here