Mergers & Acquisitions in Nigeria hit 10-year high with $3.8bn deals in 2024

• Renaissance dominates with $2.4bn SPDC acquisition 

Onome Amuge

Nigeria’s merger and acquisition (M&A) market rose to a 10-year high $3.8 billion in the first nine months of 2024, establishing the country as the second-largest M&A hub on the African continent, trailing only South Africa.

DealMakers Africa, a leading M&A intelligence firm, made the disclosure in a report featuring 10 standout deals that defined the Nigerian M&A landscape in the first three quarters of the year.

Mergers and acquisitions are a strategic business manoeuver where two or more companies combine their operations, often through financial transactions. M&As can take several forms, including:

• Acquisition: One company purchases and absorbs another company entirely.
• Merger: Two companies combine to form a new entity, with both companies’ assets, liabilities, and management being consolidated.
• Asset Acquisition: A company purchases specific assets from another company, such as patents, technology, or real estate.

Leading off the list of landmark transactions is the acquisition of Shell Petroleum Development Company (SPDC) by a consortium of five Nigerian upstream oil companies—ND Western, Aradel Holdings, Petrolin Group, First E&P, and WalterSmith Group. The deal, valued at $2.8 billion, saw the conglomerate snap up SPDC’s 45 percent interest in four oil mining licenses, with an initial payment of $1.3 billion and future cash payments of $1.1 billion to be made to Shell.

July 2024 saw the emergence of more acquisitions as  Chappal Energies acquired TotalEnergies’ onshore assets for a total of $860 million.

During the same period, Seplat Energy completed its acquisition of ExxonMobil’s MPNU Assets in an $800 million deal. Also of note, Oando PLC completed the acquisition of Eni’s subsidiary, Nigerian Agip Oil Company (NAOC), for a total of $783 million.

In another major transaction, on June 11, 2024, Diageo announced that Tolaram would acquire its shares in Guinness Nigeria Plc at N81.60 per share, with a total transaction value of N103.7 billion.

March 2024 proved to be a month of major power shifts in the Nigerian business scene. Saroafrica International created Oak and Saffron, a special purpose vehicle, which masterminded a major takeover of Presco Plc, scooping up 86.7 percent stake in Presco’s majority shareholder, SIAT Group.

Not content to rest on their laurels, Presco launched a $125 million bid to acquire Ghana Oil Palm Development Company (GOPDC), a heavyweight in Ghana’s oil palm industry.

The deal-making fever continued in the financial sector. FBN Holdings Plc made waves with the sale of its 100% equity stake in its subsidiary, FBNQuest Merchant Bank Limited, to EverQuest Acquisition LLP.

Meanwhile, in response to the CBN’s recapitalisation directive, Unity Bank and Providus Bank rocked the banking sector with their August announcement of a strategic merger. The development, the first of its kind in Nigeria’s banking sector in half a decade, was backed by a banking support package worth N700 billion from the CBN.

According to the SEC Rules on Mergers, Takeovers and Acquisitions 2021, companies intending to undertake a merger, takeover, or acquisition that results in a significant shift in the business direction or policy of a public company must first obtain approval from the Securities and Exchange Commission (SEC).