Emerging Technologies, Co-investing, Integration and Rapidly Changing Landscape Driving TMT Activity
Africa’s TMT sector continues to show impressive growth
Global, March 12, 2019 – Global mergers and Acquisitions (M&A) activity in tech and telecoms rose to USD 439 billion in 2018 as transformations within the sector continued and the emergence of disruptive cloud, mobile, social and big data analytics technologies drove deal making. The sector had an exciting and strong year for M&A, up 21% from 2017. Megadeals have dominated the headlines.
According to Baker McKenzie’s Global Transactions Forecast, issued with Oxford Economics, big-ticket transactions set for completion in 2019, and favourable market trends are expected to increase global M&A activity, with deal values predicted to increase a further 4% to USD 457 billion.
Michael DeFranco, Global M&A Chair, said: “Despite the challenges facing the sector, businesses in all industries are increasingly looking to technology to change the way they do business and propel them in their markets. As the convergence of media and technology, direct-to-consumer capabilities, the cross-sector acquisition of technology, and the expanding demand for data and AI continue, deal making in tech and telecoms will remain buoyant in 2019.”
Initial Public Offering (IPO) value in tech and telecoms rose to USD 68 billion in 2018, compared to USD 21 billion in 2017, boosted by large listings as well as activities relating to spin-offs from the big tech players. Chinese tech start-ups also continued to look at the US for better fundraising options.
Ashlin Perumall, Senior Associate in the Corporate/M&A Practice at Baker McKenzie in Johannesburg said that the technology, media and telecommunications (TMT) sector in Africa would continue to show impressive growth in 2019, with transactions expected to exceed earlier predictions of M&A investments worth USD 5.9 billion in 2019.
“Increasing M&A deals and IPOs in the TMT sector in Africa point to the growing reliance of African consumers on technology across multiple platforms. The unabated demand for technology has caused extensive cross-sector disruption in Africa, with, for example the financial, energy, transport, retail, health and agricultural sectors all seeking opportunities to expand their tech infrastructure in order to acquire the necessary skills and innovation needed to keep up with demand.”