SA's M&A landscape sees renewal as capital markets rebound
Cross border portfolio optimisation by global firms, and revived private unity investment are shaping South Africa's mergers and acquisitions[M&A] landscape at a time when the capital markets of the South African continent are experiencing new growth.
In an interview conducted by the Business Report Yvonne Ike, head of Sub-Saharan Africa at Bank of America Merrill Lynch, said capital markets in Africa “entered 2025 with cautious optimism”.
Ike stated that this was due to the confluence of stabilising macroeconomic fundamentals, greater foreign exchange flexibility in some economies, and improving debt sustainability.
All this was “helping rebuild investor confidence” across regional markets, said Ike.
“At the same time, governments are re-engaging with international capital markets after a prolonged hiatus, and local listings are regaining traction, particularly in sectors tied to infrastructure, telecoms, and energy transition,” said Ike.
“There’s also rising interest in privatisations and public-private partnerships, which is helping to deepen capital markets across key economies.”
There has been a stronger interest in Capital markets as M&A activity remains prevalent in South Africa.
Anthony Knox, bank of America’s country executive for South Africa, emphasised that local M&A activity was currently “being shaped by cross-border consolidation, portfolio optimisation by multinationals, and renewed private equity” interest.
“There’s also a clear push among corporates to simplify group structures, unlock trapped value, and pursue carve-outs which is driving strategic M&A, IPOs and secondary sell-downs,” explained Knox in an interview with Business Report.
He further explained that South Africa remains “active in both debt and equity capital markets, supported by a robust institutional base and a pipeline of state and corporate funding” needs.
Analysts at Bank of America is expecting a renewed push for the restructuring of South African State-owned enterprises and possibly reforms as well as private sector-led infrastructure investment.
As from the first quarter of 2025, about $6.7 billion has been raised through African Eurobond and dollar-denominated instruments.
Countries such as Côte d’Ivoire, Benin and Egypt have led this charge, marking “a meaningful recovery from the subdued levels of 2023, as frontier issuers cautiously return to the market amid easing global rates and improving macroeconomic” conditions.
“South Africa remains the most sophisticated and liquid capital market on the continent, supported by its deep domestic institutional investor base, active M&A environment, and regulatory strength,” said Knox.
The formation of the GNU, has been a marked improvement in the sentiment toward South Africa, pushing CDS and government bond spreads tighter and valuations higher.”