Mergers, Acquisitions In Nigeria Hit $3.8bn

The value of mergers and acquisitions (M&A) in Nigeria reached $3.8 billion in the first nine months of 2024, the highest figure on the continent outside South Africa.

The DealMakers Africa stated this, saying that during this period, 48 M&A transactions were recorded in Nigeria. This report highlights 10 of the most noteworthy deals that captured significant attention.

Reviewing this, in January 2024, a powerhouse team of five smaller upstream oil companies; ND Western, Aradel Holdings, Petrolin Group, First E&P, and WalterSmith Group joined forces to strike a major deal: the acquisition of Shell Petroleum Development Company (SPDC).  The deal, with a net book value of $2.8 billion, includes an initial payment of $1.3 billion alongside future cash payments totaling $1.1 billion to Shell.

Also, in July 2024, Chappal Energies’ $860 million acquisition of TotalEnergies onshore assets; Seplat Energy completes acquisition of ExxonMobil’s MPNU Assets in $800 million deal; Oando PLC completes $783 million acquisition of Eni’s subsidiary, Nigerian Agip Oil Company (NAOC); and on June 11, 2024, Diageo announced that Tolaram will acquire its shares in Guinness Nigeria Plc at N81.60 per share, with a total transaction amounting to N103.7 billion, pending regulatory approvals.

In March 2024, Oak and Saffron, a special purpose vehicle created by Saroafrica International took over Presco Plc, by acquiring an 86.7 per cent stake in SIAT Group, the majority shareholder in Presco, Oak and Saffron handed majority control of the company to Saroafrica.

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Just as Saroafrica’s bold move was still making waves, Presco turned heads with a $125 million bid to acquire Ghana Oil Palm Development Company (GOPDC), one of Ghana’s largest oil palm producers.

FBN Holdings Plc announced the sale of its 100 per cent equity stake in its wholly-owned subsidiary, FBNQuest Merchant Bank Limited to EverQuest Acquisition LLP; while following the Central Bank of Nigeria’s recapitalisation mandate, Unity Bank and Providus Bank announced a strategic merger in August to bolster their financial strength.

The merger which is Nigeria’s banking sector first in half a decade will receive a banking support of N700 billion from the CBN.

Mergers and acquisitions (M&As) are the different ways companies are combined. Entire companies or their major business assets are consolidated through financial transactions between two or more companies. A company may: purchase and absorb another company outright; merge with it to create a new company; acquire some or all of its major assets; make a tender offer for its stock; or stage a hostile takeover.

Under the SEC Rules on Mergers, Takeovers and Acquisitions 2021, the approval of the SEC must be obtained before undertaking a merger or a transaction for the acquisition or disposal of the shares or assets of a public company that results in a significant change in its business direction or policy.

Speaking on the acquisition of SPDC, the chief executive officer/managing director of Aradel Holdings, Adegbite Falade said, “this successful acquisition represents a key step in our journey to becoming a leading energy Company in Africa and aligns with our long-term strategic growth plans. It also demonstrates our commitment to our ‘3R’ Strategy of Resilience, Robustness, and Redundancy.”

On Tolaram acquisition of Diageo’s 58.02 per cent shareholding in Guinness Nigeria, the board chair, Guinness Nigeria, Omobola Johnson said, “today’s announcement represents a significant opportunity for the next phase of growth for Guinness Nigeria. This partnership brings together Tolaram’s deep expertise in manufacturing and distribution, and Diageo’s exceptional capabilities in brand building and innovation. I believe this is a winning combination which leaves Guinness Nigeria extremely well placed to drive further growth in this market.”