Mergers and acquisitions in South Africa are poised for a rebound in the coming year as the country’s economy begins to show signs of recovery, according to Investec Plc. As global macroeconomic metrics improve, South African companies are expected to pursue expansion abroad, while overseas firms are eyeing attractively priced assets in the local market.
Marc Ackermann, head of corporate finance and co-head of investment banking for Investec in South Africa, expressed optimism about the increased interest in opportunities from their clients during an interview with Bloomberg News. The interest in mergers and acquisitions has been renewed, driven by the belief that interest rates have peaked and the power crisis in South Africa has started to ease.
Despite the challenges posed by rising interest rates and geopolitical risks, the outlook for mergers and acquisitions in South Africa is more positive now. Ackermann noted that while the looming elections may create short-term noise, there is greater room for optimism in the longer term.
Investec, a specialist lender with operations in the UK and South Africa, has acquired a majority stake in European adviser Capitalmind Group to strengthen its M&A and corporate finance team to 200. The International Monetary Fund forecasts South Africa’s economy to grow 1% this year and 1.3% in the following 12 months, a slight improvement from previous years. Ackermann believes that this anemic pace of recovery will drive local companies to diversify overseas and tap into faster growth opportunities.
Looking ahead, Ackermann sees rising interest in pharmaceutical, retail, consumer sectors, as well as renewables and digital infrastructure spaces. He also anticipates an appreciation of the rand over the course of the year.
Overall, the resurgence in mergers and acquisitions in South Africa aligns with the improving economic sentiment and provides an opportunity for local companies to expand internationally while also attracting foreign investment.
News Summery :
– Mergers and acquisitions in South Africa expected to rebound as the economy improves
– South African companies looking to expand abroad, foreign companies interested in local market
– Completed M&A deals dropped 90% in 2023, but outlook is now more positive
– Interest in diversifying earnings offshore has increased
– Global companies may find valuations in South Africa alluring for expansion into the rest of the continent
– Rising interest in pharmaceutical, retail, consumer, renewables, and digital infrastructure sectors
– IMF forecasts slight economic growth for South Africa, potential for mid-market M&A activity to pick up
#mergers and acquisitions South Africa
#Investec Plc
#IMF South Africa growth forecast
#South African companies expansion
#Interest rates South Africa
#Global company valuations South Africa
#South Africa economy 2024
