South Africa


  • Service: Advisory, Transactions & Restructuring
  • Type: Business and industry issue
  • Date: 2011/10/27

Positive M&A activity in 2011 

All indications were that 2011 would be another year of growth or increased Mergers & Acquisition (M&A) activity on the African continent. South African M&A activity made a strong recovery in 2010, up 133 percent from 2009 and at the highest levels since 2008. A MergerMarket report indicated that M&A acquisition activity in South Africa totalled US$15.7 billion in 2010.

With South Africa joining the BRIC (Brazil, Russia, India and China) nations, it is now even better placed for boosting investment within the country as well as the entire African continent. Rumours of foreign companies looking to Africa as part of their growth strategy have begun to ring true with the recent approval, albeit with conditions, of Walmart’s offer to acquire a 51 percent stake in Massmart, for an approximate R16 billion.


Tiger Brands also recently announced their proposed acquisition of Davita Trading for an estimated R1.345 billion to support their growth strategy. The announcement stated, “Davita has an established distribution footprint on the African continent which will provide Tiger Brands’ export division with new growth vectors by leveraging off Davita’s solid distributor relationships and penetrating new geographies as well as deepening market penetration in existing markets”.


In KwaZulu-Natal, KPMG assisted as transaction and legal advisors to Unilever in their proposed disposal of STATUS, the male deodorant brand. As part of a ruling by the South African Competition Authority, Unilever was required to dispose of STATUS, which they acquired during December 2011 as part of the global Sara Lee personal care portfolio.


Unilever have announced a binding sale agreement for the sale of STATUS to Tiger Brands for an undisclosed amount.


In a separate deal, Unilever has entered into a binding agreement to acquire the Mousson foam bath and lotion brand from Tiger Brands also for an undisclosed amount, with both transactions still being subject to regulatory approval.


DealMakers’ first quarter results for 2011 indicate a total of 102 deals (Q1 2009: 87 deals) being completed in South Africa at a value of R102 billion (local deals comprised R68 billion and deals involving foreign companies comprised R34 billion). These results confirm the bullish outlook for 2011 as they are in total 42 percent better than the value of deals completed during Q1 2010.


It appears that 2011 is another positive year for M&A activity, with the hopes that the latter half is as successful, driving investment within South Africa and in the African continent.