JAPAN-headquartered global investment bank Nomura, attracted by a surge in mergers and acquisitions into the rest of sub-Saharan Africa, will set up shop in Cape Town next month.
Jan Newman, who has been appointed head of Nomura’s South African operation, said on Tuesday the bank found a doubling in mergers and acquisitions flow initiated by South African multinationals, as reported by market insights firm Dealogic, attractive.
“Outbound (mergers and acquisitions) activity in 2015 increased by 109% from 2012, demonstrating increasing internationalisation efforts of South African corporates, which are using their strengths at home to build up their international presence in Africa and beyond,” he said.
Law firm Allen & Overy, which specialises in mergers and acquisitions, recently pointed to insurer Sanlam’s $375m deal to buy a 30% stake in Morocco’s Saham Finances; as well as investment holding company Brait’s £783m acquisition of a majority stake in fashion retailer New Look and gym chain Virgin Active for £691m, as some of the deals that helped spur deal making during the year.
International investors have also expressed an interest in the rest of Africa, with Swedish telecoms operator Millicom buying an 85% stake in Tanzania’s Zanzibar Telecom from Etisalat for a nominal $1, while it assumed $74m of the target’s debt.
UK-based private equity fund Helios bought 70% of Telkom Kenya from French operator Orange for an undisclosed amount.
Mr Newman said this kind of activity — initiated by international investors and corporate entities into sub-Saharan Africa — had also increased, resulting in growing demand for investment bankers with expertise gained on the ground.
Still, it will face stiff competition from Standard Bank and Rand Merchant Bank, who have advised on megadeals such as Anheuser-Busch InBev’s inward listing on the JSE, and Woolworths’s acquisition of Australian fashion retailer David Jones.
“Nomura’s Asian heritage and market-leading presence in Japan and Asia represents a key differentiator, which we hope to leverage for the benefit of our global and local clients,” Mr Newman said.
Along with heading the bank’s Cape Town branch, Mr Newman will jointly lead its investment banking activities with Ben Lowther, his partner at mergers and acquisitions adviser Newman Lowther & Associates.
The firm’s team of eight people has been absorbed into the branch.