Those Who Don’t Sleep, These Are Some Of The Biggest Money Deals Of The Last 18 Months That Went Down In Africa
THE South African government has just banked $1.9 billion after it sold its entire stake in telecommunications firm Vodacom. It wouldn’t exactly be classified as a fire sale but its treasury was essentially forced to—the cash raised will go into funding the gaping hole in state-owned power utility Eskom which has been relentlessly load-shedding its customers.
Vodacom, which has operations in Tanzania, Lesotho, Mozambique, the Democratic Republic of Congo (DRC) and South Africa counts 61 million customers and is the African unit of Vodafone Group Plc.
While it is essentially the South African government selling to itself—the buyer is the state-owned Public Investment Corp, Africa’s largest money manager and which looks after the pensions of government workers.
The deal counts among the largest deals of all types on the continent over the last year or so, and is in the good company of other eye-popping ones:
Nigeria-China Railway Construction Corp, $12 billion
With Africa’s hunger for infrastructure China is never too far away from the billions, but the $12 billion agreement inked in November to build a railway along Nigeria’s coast was still eye-watering, billed as China’s single largest overseas contract.
China Railway Construction Corp. Ltd. (CRCC) will build the 1,402 kilometres (871 miles) long line along the coast, linking Lagos, the financial capital of Africa’s largest economy and leading oil producer, and Calabar in the east,
CRCC chairman Meng Fengchao said the project will adopt Chinese technological standards and lead to $4 billion-worth of Chinese exports of construction machinery, trains, steel products and other equipment. It will create up to 200,000 local jobs during the construction and a further 30,000 positions once the line is operational.
Etisalat-Maroc Telecom, $5.7 billion
Emirates Telecommunications Corp, Etisalat in May 2014 tied up the purchase of 53% stake in Itissalat Al Maghrib (Maroc Telecom), a foreign affiliate of Vivendi (France) for $5.7 billion. In turn Maroc early this year bought the West African operations of Etisalat, which traded under the wholly-owned subsidiary of Atlantique Telecom, for $532.3 million.
ONGC-Mozambique, $5.24 billion
ONGC Videsh Ltd (India) and Oil India Ltd in January 2014 acquired a 10% stake in Ruvuma Offshore Area of Mozambique from Videocon Mauritius energy for $2.6 billion.
ONGC Videsh is the overseas arm of India’s state-run explorer Oil & Natural Gas Corp. It also bought the 10% stake of US major Anadarko Petroleum stake in the same bloc for $2.64 billion, highlighting the scramble for Mozambique’s world-class gas resources. In April India’s oil minister said the firm would sink in at least $6 billion to develop the field over the next four years.
Eni-Ghana, $6 billion
Energy was also on the table after Italian oil major Eni had a $6 billion bid to develop Ghana’s offshore oil and gas accepted in December.
The deal relates specifically to the offshore field known as Cape Three Points.
Ghana, which began commercial oil production in late 2010 at its Jubilee field, has struggled to hit its production targets so far and has faced challenges in attracting foreign investment to fully develop its oil and gas resources.
The country currently produces around 100,000 barrels per day (bpd), far below nearby Nigeria, which churns out about two million.
Woolworths South Africa-David Jones, $2.14 billion
South Africa’s Woolworths last year took over Australia’s oldest department store David Jones for $2.14 billion after shareholders in Australia’s oldest department store overwhelmingly backed the deal.
Republic of Congo-Berven Group, $1.6 billion
US investment firm Berven Group in June 2014 signed a deal with the Republic of Congo government to build the country’s second oil refinery.
The agreement, at $1.6 billion, would solve the country’s chronic shortages of refined fuel, with the sole existing refinery, Coraf (which is run by the president’s son) creaking under demand.
Qatar National Bank, Nedbank—Ecobank; $963 million
Qatar National Bank, the Middle East’s biggest lender by market value, in September paid $500 million to the become the largest stakeholder in pan-African lender Ecobank and give it its first acquisition in sub-Saharan Africa.
South African lender Nedbank in October agreed to buy a 20% stake in Ecobank on the back of a conversion of loans to the bank, which has customers in more than 30 African countries. Nedbank is estimated to have put in $463.4 million.
Glencore-DR Congo, $360 million
Glencore in November announced that it would with its partner in Congo refurbish the country’s main hydroelectric plant for $360 million, in a bid to solve power shortages that have held back mining development.
The DRC in 2013 outstripped Zambia as the continent’s largest producer of copper, and could leave everyone trailing if the power deficit is solved. Congo’s hydroelectric potential ranks third behind China’s and Russia’s, according to the World Bank, but only 10% of its 65 million have electricity.
Carlyle Group, Blackstone Group-Aliko Dangote, billions
The world’s two largest buyout firms last year on the sidelines of the US-Africa Leader’s summit announced separate deals with Africa’s richest man Aliko Dangote to fund the continent’s infrastructure.
Dangote committed to invest a combined $5 billion by 2019 with New York-based Blackstone in power projects, while he also formed a joint venture with Carlyle to invest an unspecified amount in Nigerian oil and gas ventures and other sub-Saharan projects. Washington-based Carlyle had earlier in the year got $700 million for its SSA fund.
Some ‘small’ but honourable mentions:
KKR-Ethiopia, $200 million
Private equity group KKR last June sunk $200 million in Ethiopian large-scale rose producer Afliflora, giving the US investor its first direct investment in Africa.
Afliflora, a Dutch company operating in Ethiopia, has 450 hectares of land there and close to 9,000 employees. It is the world’s largest producer of fair trade roses. It also made the deal the largest private equity transaction in Africa in 2014.
KKR is one of the world’s largest private equity firms with $95 billion in assets managed and was founded by American billionairs Henry Kravis, George Roberts and Jerome Kolberg in 1976.
Danone-Kenya, $176 million
Danone of France bought 40% stake in Brookside, East Africa’s largest milk producer which has its headquarters in Kenya and is controlled by the First Family.
The deal was estimated at $176 million, and gave the French group access to to the largest milk collection network in East Africa with over 140,000 farmers and a distribution network of more than 200,000 outlets.
The Kenyatta family kept a 50% state, while the remaining 10% is held by Dubai equity firm Abraaj Group.
The French firm has sunk in at least $1.1 billion Africa over the past two years.
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