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Kenya attracted seven out of 10 key financial deals in East Africa

By Moses Omusolo | Mar 8th 2020 | 2 min read
By Moses Omusolo | March 8th 2020

Kenya attracted more than 70 per cent East Africa’s financial deals last year, cementing its position as the region’s investment hub.

Corporate finance advisory firm I&M Burbidge Capital (IMBC) has found that last year, Kenya took up 78 out of 111 deals that the region attracted in the previous year.

Kenya’s closest rival Uganda, the report said, clinched a measly 12 business agreements. Tanzania, Ethiopia and Rwanda, on the other hand, posted eleven, seven and three deals respectively. 

According to IMBC, Kenya’s position was boosted by recent big-ticket transactions, including Africinvest Azure SPV (Africinvest) of Mauritius and AfricInvest Tunisia SARL which acquired a 24.2 per cent stake in Prime Bank for a total Sh5.1 billion.

“AfricInvest acquired an additional 49.3 million shares in insurance group Britam Holdings for Sh450 million raising its stake in the Nairobi Securities Exchange listed firm to 16.26 per cent,” said the report.

Deal statistics also show that Kenya’s disclosed deal value was the highest in the region at Sh104.9 billion boosted by the financial services sector. This was, however, Sh99.6 billion lower than Sh204.5 billion the country netted in the previous year.

Tanzania’s deals value came second at Sh28.8 billion also boosted by the financial services sector.

IMBC further said East Africa last year witnessed some 110 disclosed deals valued at Sh175.9 billion with a median size deal of Sh1.2 billion.  

The deal numbers were, however, Sh142.7 billion less than Sh318.6 realised in 2018. “2019 presented mixed fortunes for the East African region. Improvement in growth was witnessed in Uganda and Tanzania whilst Rwanda and Kenya recorded slight declines in growth,” said the firm’s analysts Edward Burbidge and Kevin Kuria. The data shows East African mergers and acquisitions dropped to 30 in 2019 from 56 recorded the previous year.

“M&A activity was somewhat dampened in 2019 with just 30 transactions having been recorded, with a total disclosed deal value of Sh75.5 billion and a median deal value of Sh2 billion from 10 transactions whose values were disclosed,” said the report. 

The decline in performance was attributed to the challenging economic conditions. “We believe that the repeal of the rate cap law is likely to improve business conditions and confidence spurring increased mergers and acquisitions activity in 2020.”

IMBC, however, found that private equity deals increased to 69 last year from 51 in 2018. “Private equity activity ... was robust with the number and value of deals up 37.3 per cent and 6.5 per cent respectively,” it said.

The study said there were a total of 76 PE and VC transactions with a disclosed deal value of Sh96.3 billion with a median deal size of Sh1 billion. Additionally, there were 10 early stage investments with a total disclosed deal value of Sh688.2 million. 

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