Dealmakers Dreaming of African Riches Move Bankers to Next China

In his ten-year career as a banker at Lazard Ltd., Matthieu Pigasse has advised on some of France’s biggest deals, including the $50 billion utility merger that created GDF Suez in 2008. Yet one humid evening last July, he could be found in Congo’s capital city of Brazzaville, hoping to catch the last ferry across the river for meetings in Kinshasa.

In September, Lazard announced that Pigasse, who lives in Paris, would head up a team that now numbers more than a dozen bankers dedicated to mergers in the region based in the French capital. He now spends about a third of his time criss-crossing Africa.

“It is the new frontier,” says Pigasse, 44. “The potential of the M&A market will be big in the coming years. It is not huge now, but we believe because of the growth prospects we have to be there.”

Banks including Citigroup Inc., Barclays Plc and Standard Chartered Plc are also gradually expanding their presence in the region, the world’s second-fastest growing area after Asia, according to the International Monetary Fund. While the numbers are modest, the expansion is coming while banks are paring workers across Europe, the U.S. and emerging countries.

“Being first will be a big advantage,” said Crispin Osborne, who oversees Barclays’s African investment banking operations from London and is planning to hire on-the-ground investment-banking staff in East and West Africa this year.

“You simply can’t ignore the fact that urbanization and economic growth will determine the long-term outlook.”

Largest Deal

Takeovers and private-equity investments in Africa have so far focused on natural resources and telecommunications, reflecting a continent rich in commodities and fast to adopt mobile technology. The region’s largest deal ever remains Bharti Airtel Ltd.’s $10 billion acquisition of the African mobile assets of Kuwait’s Zain in 2010.

Interest in the region’s consumer and retail sector has also surged as investors look to benefit from a rising middle class. Wal-Mart Stores Inc., the world’s largest retailer, paid 16.5 billion rand ($2.42 billion) for a 51 percent stake in Johannesburg-based Massmart last year.

“Every corner of the globe wants a consumer play in Africa,” said Brian Smith, who oversees investment banking in Sub-Saharan Africa from Johannesburg for JPMorgan Chase & Co., which has advised on deals from Wal-Mart’s acquisition of Massmart to providing the financing facility to Ethiopian Airlines to purchase Boeing 787 planes.

Rapid Urbanization

With 52 cities with a population of more than 1 million, more than Europe and the U.S. combined, and 738 million mobile phone users, there’s undoubtedly growth to be tapped.

“Urbanization is starting to take place pretty rapidly across the continent, driving consumer demand,” according to Nicholas Young, who runs Citi’s African operations from Johannesburg.

Bankers’ increased focus on Africa is taking place even as they retrench in emerging markets in Latin America, Asia and the Middle East, where once-rapid growth is slowing. Citigroup announced plans last month to eliminate 11,000 positions in countries from Pakistan to Paraguay even as it said its 1,300- employee African operations, which include Nigeria, Uganda and Kenya, wouldn’t be affected. In December, Barclays agreed to a
$2.1 billion deal to increase its stake in Absa Group Ltd. and combine its African operations with the Johannesburg-based lender.

Africans Returning

The continent’s growth has drawn attention from expatriate African bankers in hubs like New York and London. “We constantly get a flood of good CVs that come to us, including from a lot of Africans who’ve worked abroad and see opportunity at home,” said Axel Smeulders, who heads African M&A for Standard Chartered. The firm has about 15 M&A bankers based in Lagos and Johannesburg.

Even so, banks chasing African deals are playing a very long game. Investment banking fees in the region totaled about $305 million in 2012, according to researcher Freeman & Co., doubling since a decade ago but still just a third of those paid out in the same period in Italy, which has less than one-tenth the population. Deal volume in 24 sub-Saharan African countries tracked by Bloomberg rose 12 percent to $35.4 billion last year from 2011, escaping the global decline in M&A.

Bankers’ enthusiasm is tempered by the challenges of operating in a region with unstable politics and nascent capital markets -- to say nothing of basics like unreliable roads or electric grids.

Traffic Nightmare

In Lagos, Nigeria’s commercial capital of 20 million people, the 18-mile drive to the airport can take two hours on a good day. When Citi’s Young was getting ready to welcome then- Chief Executive Officer Vikram Pandit to the city for the first time in 2010, an oil tanker flipped over on the highway, leaving the firm’s welcoming party to make a six-hour journey through winding backstreets to pick him up, Young said in an interview.

“Africa has a lot to do in education, infrastructure, the judicial system,” said James Tidmarsh, a Geneva-based lawyer who raises funds for mining projects in east and central Africa.

“If someone owes you money, you need to be able to get that money back.”

To buyout firms, those needs represent deals waiting to happen. Private-equity transactions in Sub-Saharan Africa jumped by 19 percent to 43 deals in the first nine months of last year, compared to a decline of 17 percent in China to 179 transactions, according to the Emerging Markets Private Equity Association.

Like China

The Washington, D.C.-based Carlyle Group LP established a nine-person team based in Lagos and Johannesburg for Sub-Saharan Africa last year. In November, Carlyle made its first sub- Saharan investment, joining other backers to put $210 million into agricultural supply-chain company Export Trading Group, based in Tanzania.

“We saw sub-Saharan Africa as being where China was 15 years ago, and we wanted to be one of the first there,” said Genevieve Sangudi, the Lagos-based managing director for Carlyle’s regional fund.

Private-equity firm KKR & Co. has hired Kayode Akinola in London from Helios Investment Partners, a private-equity firm focused on Africa, to lead the firm’s push into the continent.

“It’s indisputable that if Africa needs one thing, it’s patient capital and the deep industry sector expertise and experience to put that capital to work,” said Akinola.

Pigasse recalled how observers skeptical about Brazil, India, Russia, and China were eventually proven wrong, and says the same will hold true for Africa.

“Two, three, four years from now, it will become a very important market,” he said.

If this is what the construction company is trying to achieve.....than, this is ingenious for Delta.

feelamong:

yea go on and give it a trial. Notwitstanding the drop in yield, it still remains the best money market investment to me. I invest , take my interest upfront, and still get a rate far better than any Fixed deposit; yet witout any withholding tax!

take my interest upfront - what do you mean by this, can you be paid interest before your TB matures
yet witout any withholding tax! - you are saying no WHT, but what does the bank charge for running investment for you.

How do you deliver outside lagos.

how do you your handle payments.

hello Vic, the Following brands price please,
HP Pavilion dv6-6090ee
HP Pavilion dv6-6161sf
HP Pavilion dv6-6091nr
HP Pavilion dv6-6003tx
HP Pavilion dv6-6181tx
HP Pavilion dv6-6180us

hello Vic, how much you go sell HP Pavilion dv6t Quad Edition QE to me.

mabelly: The form has been sent to the following email;
zeuskyrocky(at)gmail.com,
blackphall(at)yahoo.com,
infogenius33(at)yahoo.com,
jidowu84(at)gmail.com,
gyprince(at)yahoo.com,
tmorotmoro(at)yahoo.com,
emma_nd(at)yahoo.com,
p.philip8131(at)yahoo.com,
feelamong(at)gmail.com,
seyioluks(at)gmail.com,
humblelove2010(at)yahoo.com,
coex123(at)gmail.com,
markmorison02(at)yahoo.com.
Please do check
your email for confirmation and also notify us here.

could you also send the form to glinez@gmail.com, thanks.

please Where and when are PH guys meeting.

glinez@gmail.com

sincere pursuit of the real baptism will be met with God’s acceptance, and a positive response will occur. A negative pursuit for the wrong reasons will either end up with failure, or a demonic counterfeit. No sincere believer wants that to happen.

The baptism is made possible by the salvation relationship one has with Jesus Christ, who asks the Father to send the Holy Spirit to those who believe in Him.

Receiving the baptism of the Holy Spirit is equivalent to receiving a person, not a “thing.” So, the baptism is a “Him,” not an “it.” Proper indwelling requires a yielded vessel, repentant, loving, humble, submissive to God. One could receive the baptism by the laying on of hands, but it must be without public pressure or coaching. The Holy Spirit can fill a person without man’s help. The real baptism is NOT a learned experience, but quite the opposite. The baptism is God filling the person the person with Himself.


The person should be willing to speak out in faith, and allow the Holy Spirit to take over the natural language they are using in their prayers. Sometimes it helps not to speak a natural language, but to just utter sounds, in order to disconnect their minds from trying to influence the initiation of the baptism. This is done, knowing that these are just sounds to relax the person and their tongue, and not a real language. Many times, people feel so self conscious with others around, they cannot receive this gift. It is best then, to go and be alone with God.....culled from the internet

hope people will see them driving it on the streets, not just a photo flick on nl

Abeerdeen, Newcastle etc

http://www.dailymail.co.uk/news/article-2208269/UK-weather-Flood-warnings-North-foam-covers-Aberdeen-fishing-village.html?ICO=most_read_module it's not just benue, its global.....the end is surely here.

Nice one, but just as earlier advised work on your pics to get out the best from them, making them web ready before uploading, like the vw beetle job, its vintage but the 'after pics' did not show much.

Would you recommend stuff I could use for waxing and washing locally?

The issue here is not to attck men of GOD, but to dissuade people from worshiping men, and give the Saviour of Souls HIMSELF, JESUS the place HE deserves.

a 2 bedroom flat in Ogbunabali got over 11,000k phcn bill for a month, is something not wrong somewhere please?

May the LORD continue to use you to HIS Glory.

its not the tariff only, but on about two ocassion, I have discovered that my airtime just dissappears, I have checked but cant find any reasonable reason for this, can someone help out please.

CHESSBOARD:

Imagine me flying in a plane old than me, that is suicide mission .
Operators should attached the flight serial Number to their schedules so that we will know which plane and its age we are about to enter.

think they do at the point of booking online.

the arms seized in Onitsha where was it aheading to?

bandiejay: [size=18pt]the GTB online stuff i only consider best but Damn!! do you think i can stand that crowd? [/size]

True.....

How true

Lets have your range? Can ask around. 08186138905

Where does a someone new start from?

sartorius: why not try invest in hostel accomodation, it pays if you manage and package it well, i tried something like that with not so much and i tell you , long term it pays,  ---------------------------------------------------------30 room well furnished  with all mordern amenities- at least -each room goes for about 150 gees, about 4.5 m each session, land aint so expensive like yaba for lag etc , or you could refurblish houses there on agreement

good one. Will need more info from u, how can one reach you

New and interested. Whats next?

Once attended one of their sessions in Nigeria, no difference from one who was on campus, you will have d opportunity of going over for graduation and online is not written on ur certificate.

it aint forever, make that decision now

interested.