Surge in M&A across Africa as telcos seek scale

Surge in M&A across Africa as telcos seek scale

Africa’s telecom, media and tech markets remain vibrant and operators are looking to up investment and target acquisitions to meet the growing demand for connectivity, according to organisers of the TMT Finance Africa 2017 conference on 24 May in London.

Enda Hardiman, Managing Partner, Hardiman Telecommunications, said, “The African TMT vista remains extraordinarily vibrant. Fundamental demand is not in doubt, and neither is exponential growth in demand. This is reflected by telecommunications operators seeking economies of scale. This holds across the mobile sector, the towers sector and the broadband connectivity sector.”

Hardiman will host the Telecom Leadership Panel at TMT Finance Africa 2017 on May 24 in London, which will discuss strategies for regional growth, and includes: Thomas Chalumeau, Strategy Managing Director MEA, Orange; Stephen Van Coller, Stephen Van Coller, VP: Digital Services, Data Analytics and Business Development, MTN Group; David Eurin, Group CSO, Liquid Telecom; and Julian Adkins, CFO Africa, Millicom.

“In mobile, transnational groups are consolidating operations,” Hardiman commented. “This holds across countries and regions. It also holds in the case of potential acquisition of single-play LTE operators. New commercial strategies emphasise social media, entertainment and finance. ‘Basic’ connectivity no longer suffices. Investment continues apace.”

“In towers, critical mass achieved by transactions to date is now being consolidated. Further transactions, including major liquidity events, are in prospect. Significant impetus is lent to the sector, together with corresponding capital requirements, by developments in fibre connectivity, power, and, not least, the burgeoning IoT sector,” he said.

Hardiman added: “In broadband connectivity, the capacity of international submarine landing points is being extended inland. Major initiatives are under way, following African trade routes. Spurs are continually added to transnational and transcontinental terrestrial backbones, enhancing both mobile and fixed line connectivity. Satellite has experienced a resurgence in serving demand in outlying regions. These initiatives are capitally intensive, engaging equity, debt and project finance.”

In September 2016, Standard Bank and TMT Finance hosted a conference in Lagos with Nina Triantis stating that many companies were considering strategic options, as well as growth along diverse verticals, private debt and equity financing rounds, M&A and public listings.

“The debt markets continue to be supportive for the right companies in Africa, despite macro challenges in many African countries as well as global uncertainty, though the funding currency and medium will inevitably reflect these challenges,” she added.

Stakeholders made reference to several deals in Africa, particularly MTN’s Nigerian IPO, the sale of South Africa’s Neotel to Liquid Telecom, Millicom’s strategic review of its African assets, several fibre investment projects and fundraisings, as evidence of continued and strategic investment.

Source: IT Web Africa