VENTURES AFRICA – South Africa is experiencing a steady increase in mergers and acquisitions activity after a lull that lasted more than a year.
Companies have been cautious to engage in these activities because of the Eurozone debt crisis and the 2007/8 global economic downturn.
But analysts have been calling for companies to engage in mergers and acquisitions because assets had become cheap because of the recessions.
It seems, however, that South African companies have heeded this call.
On Wednesday, the JSE-listed industrial minerals exploration and development company Sephaku Holdings (SepHold) said it would acquire Metier Mixed Concrete, a supplier of ready-mixed concrete products, for 365 million rand ($41 million).
It said this would balance its investment in Sephaku Cement, in which it holds a 36 percent stake. It said its partner in this business is Nigeria’s Dangote Industries, one of Africa’s most aspiring companies.
Companies like Dangote in Nigeria and PPC in SA are gearing up for an infrastructure boom across Africa.
This announcement came shortly after Rainbow Chicken, South Africa’s JSE listed poultry producer, on the same day said it would buy a major stake in Foodcorp, another food retailer, for more than a billion rand.
Rainbow, which has African expansion ambitions, will buy the stake in Foodcorp in partnership with Capitau, an independent debt originator.
Traders told Ventures Africa Online that the South African market should expect other mergers and acquisition announcements before the end of the year and early next year.