South Africa-based consumer internet company Naspers boosted merger and acquisition (M&A) activity in Sub-Saharan Africa during the first nine months of 2021.

This is according to Refinitiv, a global provider of financial market data and infrastructure, in its report – Sub-Saharan African investment banking analysis for the first nine months of 2021.

According to the report, published yesterday, an estimated $387.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2021, a 15% increase from the same period in 2020.

It notes that while debt capital markets underwriting fees increased 148% to $117.8 million − the highest year-to-date period since its records began in 2000 − fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first nine months of 2020.

Equity fees declined 17% to $50.7 million, while syndicated lending fees declined 4% to $148.2 million, says Refinitiv, adding that advisory fees earned in the region from completed M&A transactions reached $70.8 million, down 3% from last year, to the lowest first nine-month total since 2013.

It points out that 58% of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2021, and 23% were earned from deals in the financial sector.

Standard Chartered earned the most investment banking fees in the region in this time frame − a total of $33.1 million, or an 8.5% share of the total fee pool.

Established in 1915, Naspers has transformed itself to become a global consumer internet company and one of the largest technology investors in the world. In SA, Naspers is one of the foremost investors in the technology sector and has committed to building its internet and e-commerce companies in the country.

These include Takealot, Mr D Food, Superbalist, OLX, Autotrader, Property24 and PayU.

“Boosted by the $44.1 billion (R659 billion) Naspers-Prosus share swap in May, the value of announced M&A transactions with any Sub-Saharan African involvement reached $78.3 billion (R1.1 trillion) during the first nine months of 2021, more than four-times the value recorded during the same period last year and the highest first nine-month total since our records began in 1980,” says the firm.

Bob van Dijk, group CEO of Prosus and Naspers.

It adds that the number of deals increased 4% from last year to a three-year high of 584.

Earlier this year, Prosus and its parent company Naspers concluded a deal that sets up a cross-holding structure and moves majority ownership of their international assets to Amsterdam.

The share swap deal resulted in Naspers owning a 57% majority stake in Prosus, down from 73.2%. In turn, Prosus took up 45.33% of the total issued share capital of Naspers.

“The transaction increases the size of the Prosus free float and more than doubles its ownership of the group’s outstanding global consumer internet portfolio,” said Bob van Dijk, group CEO of Prosus and Naspers, at the time.

Refinitiv says M&A involving a Sub-Saharan African target reached $61.8 billion, again lifted by the share swap deal to an all-time record first nine-month total, while the number of deals increased 8% over last year.

Inbound deals, involving an acquirer outside of Sub-Saharan Africa, increased 86% to $9.6 billion, while Sub-Saharan African outbound M&A more than doubled to $11.5 billion.

With advisory work on deals worth a combined $52.1 billion, Morgan Stanley held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2021, the firm notes.

According to the report, Sub-Saharan African equity and equity-related issuance reached $971.2 million during the third quarter of 2021, the highest quarterly total in more than two years.

Despite the strong third quarter, total proceeds raised during the first nine months of 2021 were down 42% from last year at $1.2 billion, the lowest first nine-month total since 2005.

“Sub-Saharan African debt issuance totalled $37.2 billion during the first nine months of 2021, up 149% from the value recorded during the same period in 2020 and the highest first nine-month total since our records began in 1980,” says Refinitiv.

The number of issues increased 33% over the same period, it notes, adding that $15.2 billion worth of the bond proceeds were raised during the third quarter alone, with both Prosus and the Federal Government of Nigeria raising $4 billion.