Corporate mergers to defy elections

NAIROBI, KENYA: The number of corporate deals in Kenya is expected to remain stable despite the impending elections and a subdued economy.

According to mergers and acquisitions experts from MMC Law Africa, the country will continue seeing investors pump in money through acquisitions as opposed to previous election periods where they have largely adopted a wait-and-see attitude.

Intense competition from global players looking for a piece of emerging markets, increased cash flow and demand for expert and experienced human resource personnel by local firms are among the key drivers of mergers and acquisitions.

“It is expected that the upward trend on the number of mergers and acquisitions in Kenya and in the region shall continue. However, this is also subject to certain enabling factors such as stability, especially following the General Election that is coming up in August and a friendly regulatory environment,” said Bernard Musyoka, partner at MMC Law Africa.

Completed transactions

The 2007 post-election violence resulted in a dip in mergers and acquisitions in Kenya but the market revived after peaceful polls in 2013.

“Since then, there has been a sustained beehive of activity in recent years in the mergers and acquisitions scene in Kenya,” said Mr Musyoka.

A report by I&M Burbidge Capital showed Kenya accounted for 72 of the 107 completed transactions in 2016 in East Africa. The deals made in Kenya were worth Sh98 billion out of the Sh200 billion made in the region.

Audit firm PwC recently ranked Kenya higher than South Africa and Nigeria as a preferred destination by chief executives of big African companies planning to expand their operations. Fourteen per cent of CEOs interviewed picked Kenya compared to 13 per cent for South Africa and 11 per cent for Nigeria. [Macharia Kamau]