KCB Bank Group and Naivas were on Tuesday named among East Africa’s notable Mergers and Acquisitions for 2022 at the DealMakers AFRICA Awards in Nairobi.
The gala event recognized advisory firms that were involved in executing notable company mergers and acquisitions and general corporate finance in East Africa.
The advisory firms nominated notable mergers and acquisitions for two categories: East Africa’s deal of the year and East Africa’s private equity deal of the year. From these nominations, DealMakers AFRICA generated a shortlist and ultimate winner in each of the two categories.
KCB Group’s acquisition of Trust Merchant Bank (TMB) was named the region’s deal of the year, while Naivas’ stake exit was named the region’s private equity deal of the year.
Marylou Greig, the head of DealMakers AFRICA, commented that KCB Group’s acquisition of TMB was one of the region’s biggest deals to be executed in East and Central Africa over the past few years.
“It provides KCB with an opportunity to tap the immense trade opportunities that come with the DRC’s recent admission to the East Africa Community (EAC),” she added.
Naivas’ stake exit was the most notable in the category due to the magnitude of the deal. A consortium led by Mauritian conglomerate IBL Group and companies, including Proporco and French Fund, acquired a 40 per cent stake in Naivas worth KSh 18.25 billion. The amount represents almost three times the price paid by the minority shareholders just two years prior in 2020 when they acquired a 31%.
The awards committee also named the combination of the African operations of Sanlam Group and Allianz in its Special Recognition Award of 2022. The transaction is expected to reshape Africa’s insurance industry, as it involved 27 countries and 12 overlapping countries.
West Africa continued to dominate with the highest deal value of mergers and acquisitions at US$3.29 billion, with Nigeria the centre of activity with 135 deals. It was followed by East Africa, which recorded a deal value in aggregate of $2.88 billion.
Kenya was the most active of the East African countries, recording 123 deals of the 162 for the region. Total local mergers and acquisition deals sealed in Kenya in 2022 are valued at US$1.1 billion.
According to Greig, macroeconomic factors such as the war in Ukraine, inflationary pressures, and rising interest rates have led to a slowdown in activity witnessed, especially in the second half of the year.
She added that the factors are likely to keep activity subdued for now, impacting market sentiment, valuations, and the cost of debt financing.