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Regional deal making activity suffers decline on Covid-19

By Moses Omusolo | Oct 22nd 2020 | 2 min read
By Moses Omusolo | October 22nd 2020

East Africa’s corporate deal-making landscape witnessed a 16 per cent decline in the wake of Covid-19 pandemic and its aftershocks, new industry figures show.

Corporate finance advisory firm I&M Burbidge Capital (IMBC) report shows that as of August this year, the pandemic hurt the ability of the region to seal major business agreements.

Longer transaction timelines that take six to 15 months also affected deal-making in the region during the month. The year started well until August when the region clinched only four major business deals compared to 12 in the same month last year.

This represents a 66 per cent decline. The value of transactions stood at Sh228.2 million in August compared to Sh18.9 billion in the same period last year.

Although Kenya took up 52 out of 73 deals that the region had attracted from the beginning of the year to August, this was a nine per cent drop. It booked 57 deals during the same period last year.

Kenya’s closest rivals Ethiopia, Tanzania and Rwanda clinched six business agreements each. Uganda posted three deals since the year began.

Of the four big-ticket transactions that the region attracted in August, three of those fell to Kenya headlined by Proparco’s multi-million dollar debt investment in Kenya Nut Company. 

Tanzania was the only country that had posted a major private equity transaction in the same month, represented by DOB Equity, a Dutch family-backed impact investor.

It made a further investment in Tanga Fresh, a dairy processor. IMBC analysts Edward Burbidge and Kevin Kuria said the region’s corporate deal making was expected to pick up by end-year, as economies recover from Covid-19 containment measures.

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