What Makes African M&A Unique: Lessons from Two Decades of Deals

“What Makes African M&A Unique — Lessons From Two Decades of Deals” As of recent years, there has been increased intra African deals. Historically, new investments into African market was from outside the continent, but now we see a gradual shift involving expansion/increased investment across and within Africa. This means that, there is an increased capital shift within African countries and having businesses which operate across multiple African jurisdictions. This has definitely led more integration within the continent, although self-sustenance is still low. There is diversification of sectors for investment. M&A deals have historically been largely in the minerals sector which involved mining and exportation of raw minerals from the continent.

In recent years, there has been a shift to wider sectors including energy, hospitality, agriculture, financial services, health care, telecommunication and tech-driven investments. This is a positive step towards expanding Africa’s potential as opposed to loss of minerals which are mainly processed from outside the continent. Even in the mining sector, some African countries have taken strict initiatives mandating local processing, domestic use and utilization of mined minerals with the aim of ensuring there is a larger benefit gained locally.

African continent has seen increased combination of regulatory, cultural, and operational factors that demand deep local knowledge: Regulation & Ownership Requirements: Some jurisdictions impose local ownership or government participation clauses, especially in strategic sectors like energy, mining, oil and gas, and tourism, making local partnerships essential for deal success. Cultural Integration Challenges: Post -merger challenges often stem from cultural and familial business relationships that influence employee loyalty and integration processes in ways that differ from Western contexts. Accordingly, there is an increased initiative to continue with collaboration between the local investor(s), employees and foreign investor post-merger to ensure smooth transition. Increased presence and role of private equity funds (PE) and venture capital (VC) firms.

Africa has witnessed increased interest by PE and VC firms across various sectors. This has revolutionized the business environment and Africa markets by influx of capital, technology, international business knowhow and management expertise. Whilst Africa market share in the global economy is still low, the role played by PE and VC firms cannot be understated. Africa has proved to be persistent and determined to grow and prosper despite multiple challenges affecting its markets. Increased compliance and transparency by companies operating in Africa, particularly those operated and managed by locals . Compliance and transparency by private companies operating and doing business in Africa was almost none existent. The influx of investors from within and outside of the continent

who, before investing, are keen to ensure that these companies are in full compliance, from tax to regulatory filings, has resulted in increased compliance and transparency. Author: Amalia Lui Africa Projects, Investment & Strategy Advisor | Business Development & Cross-Border Deal Execution | Government Relations, Risk & Legal Insight | 15+ Years Driving Growth Across Multiple Jurisdictions Email: Amalialui.shio@clydeco.co.tz Linkedin: https://www.linkedin.com/in/amalia-lui- 95548317/ Disclaimer The views expressed in this paper are those of the author only and should not be considered as an official interpretation, defamatory or interference of any legislation, laws or policies of any country including Tanzania. The contents of this paper should not under any circumstances be reproduced or used without our express written consent.

It should not be considered as a legal advice to any of its recipient(s) and should not be relied upon without obtaining further legal advice. We accept no liability for any loss occasioned or suffered due to the contents of this paper.