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Mergers & Acquisitions:
A review of activity for the year 2007

South Africa saw a substantial increase in the value of M&A transactions in 2007 as the top ten deals came in at R208.1bn, a 51.5% increase from 2006.

Foreign direct investment was a key driver of M&A activity in 2007 with the announcement of two of the largest deals for the year being Bain LLC’s acquisition of Edcon and the 20% investment by China’s largest bank, the Industrial and Commercial Bank of China (ICBC) into Standard Bank. The investment into Standard Bank was the largest made by the Chinese bank, and the largest made into Africa.

Black Economic Empowerment (BEE) has played a significant role in breaking up traditional corporate formations and ensuring a dynamic mergers and acquisitions (M&A) deal-flow, and 2007 was no exception.

International trends were also reflected in the overall increase in the volume of transactions and the increased presence of emerging market companies on the local scene. “This trend was signified by the largest transaction of the year, the sale of a 20% stake in the Standard Bank group to the Industrial and Commercial Bank of China,” says Dave Thayser, director for Ernst & Young Transaction Advisory Services and Editor of the book.

He acknowledges that the major difference between the local and international M&A scene in 2007 was the continuing presence of BEE. “M&A transactions constitute one of the dimensions of BEE and it consequently has become an important, perhaps crucial, aspect of M&A activity over the past few years.”

Head of BEE at Ernst & Young, Sugan Palanee commented that the publication of the Codes of Good Practice required companies to review their plans because the old focus on equity ownership as the first priority had now been de-emphasised. As a result, other aspects of BEE such as black participation in business and procurement from black business became more significant. Read more

Click here to read the Foreword of the Ernst & Young Mergers & Acquisitions: A Review of Activity for the Year 2007.

M&A Editions


Where do I get a copy of
Mergers & Acquisitions?

The 17th Ernst & Young M&A review is available from Exclusive Books and leading academic bookstores, ISBN No: 978-0-620-40557-7. For more information please contact Melissa van As on (011) 502-0537 or Contact Us Melissa van As

Previous Editions of Mergers & Acquisitions

Click here to read the
summaries and statistics from previous editions of Mergers & Acquisitions.
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