In 2019, billionaires and business magnate across Africa restrategise their plans, some acquire more firms, seals deals, while others sell-off subsidiaries.
Aliko Dangote, Africa’s richest man, who is constructing what will become the largest refinery on the continent, successfully sold its ‘loss-making’ flour business to Olam International.
Billionaires Femi Otedola, Tony Elumelu also completed business deals.
Since the beginning of 2019, businesses and investment across Africa continue to grow and various investment deals were sealed.
According to a recent World Bank’s regional economic outlook, growth in sub-Saharan Africa is projected to remain at 3.2% in 2019 and rise to 3.6% in 2020. Most of the growth will come from strong non-resource-intensive countries like Kenya, Rwanda, Uganda, and several in the West African economies.
With this in mind, 24 countries will see their per capita income rise faster than the rest of the world, as Africa becomes one of the fastest-growing economies.
Africa’s private sector accounts for over four-fifths of total production, two-thirds of total investment, three-fourths of total credit to the economy, and employs 90 % of the employed working-age population.
Business Insider SSA looks at how African businesses and their owners are restrategising to accommodate tech disruption, business outlook ahead of 2020, even as Africa’s free trade pact slowly emerged.
1. Aliko Dangote dropped his flour business
In April 2019, Aliko Dangote, Africa’s richest man, made a corporate disclosure, to sell a unit of his conglomerates, Dangote Flour Mills Plc, to Olam International, at a value worth N130 billion, an equivalent of $361.11 million.
Olam International (Reuters)
Tough business environments, including Apapa gridlock, and the impact of smuggling on the industry was a key reason for the strategy.
Olam through its subsidiary, Crown Flour Mills Limited, believed the acquisition form part of the company’s strategy to strengthen its portfolio by investing in proven businesses where it has consistently performed and gained market-leading positions.
2. Femi Otedola dropped Forte Oil Plc to focus on Geregu Power
In June 2019, Nigerian billionaire Femi Otedola divested from Forte Oil Plc to “focus on his power generation business, Geregu Power Plc.”
Nigerian billionaire and former chairman of Fortel OIl Plc, Femi Otedola
Last year, the Nigerian billionaire invested $350 million into Geregu.
Forte Oil Plc now acquired by AbdulWasiu Sowami, the founder and CEO of Prudent Energy and Services Limited, a $600 million gross revenue downstream company.
3. Herbert Wigwe’s Access Bank Plc is planning to become Africa’s go-to for the financial transaction – swallowed Diamond Bank and about to acquire Kenya’s agricultural-friendly bank, Transnational Bank Plc.
In April 2019. Access Bank completed a merger scheme with Diamond Bank in Nigeria. The arrangement saw Diamond Bank transferring all its assets, liabilities, and undertakings to Access Bank.
Herbert Wigwe; GMD/CEO Access Bank Nigeria delivering the opening speech
The bank has also scaled few regulatory hurdles to buy 93.57% assets of the Kenya’s Transnational bank.
4. Vodacom Group dropped subsidiaries in 5 sub-Saharan Africa countries in three separate share purchase agreements
In June 2019, Vodacom Group sold units in Nigeria, Zambia, Angola, Ghana, and Cote d’Ivoire.
Synergy Communications bid for subsidiaries in Nigeria, Zambia, and Cote d’Ivoire while Internet Technologies Angola (ITA) takeover Vodacom in Angola and Vodafone Ghana takeover Ghana subsidiary.
5. Media24, a subsidiary of Naspers shut Careers24, online job portal in Nigeria
In January, Business Insider SSA exclusively reported the exit of Careers24, an online job portal in Nigeria. Careers24 Nigeria was the unit of Media24, a subsidiary of Naspers, South African-based multinational internet and media group.
Ishmet Davidson, CEO of Media24, had explained that the exit will have no impact on Careers24’s operations in South Africa.
6. Lafarge Africa disposed of South Africa subsidiary for $317 million to pay off loans
In the same June, Lafarge Africa Plc sold its South African operations for $317 million to pay-off a related-party loan, amounting to $293 million.
Cement mixer trucks sit parked on the quay side at a Lafarge SA (Fabrice Dimier/Bloomberg)
The company disposed of its 73% equity shareholding in Lafarge Mining South Africa, 79.7% of the equity shareholding in Lafarge Industries in South Africa, and 70.1% of the equity shareholding in Ash Resources Limited in South Africa.
It attributed the strategy to a competitive environment, slow recovery, and struggle to defend market share.
7. Pan-African e-commerce platform disposed real estate portal to Mubawab
In June, Jumia sold its north-African real estate portal, Jumia House, to the Dubai-based Emerging Markets Property Group, Mubawab, at an undisclosed amount.
A Jumia signpost in Warri along agbarho Ughelli-Road (newcrycommunications)
Jumia’s real estate assets include those in Morocco, Tunisia, and Algeria.
The divestment came weeks after the e-commerce giant listed on the New York Stock Exchange through an Initial Public Offering.
8. Nigerian billionaire Benedict Peters sealed mining deal in Zimbabwe
Nigerian billionaire Benedict Peters awarded a licence for commercial mining of platinum in Zimbabwe.
The deal was sealed through a Mauritian-incorporated company, Bravura Holdings Limited, in which the 52-year-old Nigerian oil magnate holds a major stake.
The company will develop the Serui Concession, south of the Hartley complex on the Great Dyke.