MERGER and acquisition (M&A) activity involving South African companies surged this year. Information provider Thomson Reuters said yesterday that deals in the pipeline in the first three quarters of this year were worth 523.7 billion (R165.8bn), compared with 515.9bn in the whole of last year and S19.lbn In 2008.

The value of M&A deals peaked in 2007 at $43.8bn. However, none of the current year’s biggest deals have been concluded. Most of the activity came in the third quarter with deals valued at $13.4bn, compared with $4.lbn and 56.2bn in the previous quarters, according to Thomson Reuters.

Topping the year’s list is a major cross-border transaction

— the intrnded $4.3bn bid announced this week by US-based retailer Wal-Mart for South Africa’s Massmart.

The local company owns Game, Makro, Builders Warehouse and Jumbo stores. Another cross border deal is next on the list — the 53.1bn pending acquisition by Nippon Telegraph and Telephone (NTT) of South Africa’s technology service provider Dimension Data. The Competition Tribunal approved the transaction earlier this month.

According to NIT, at the first closing date earlier this month, It held acceptances from 79.71 percent of shareholders. The acceptance date was extended to October 11.

At number three in the rankings is the pending $2.4bn acquisition of Tsogo Sun by Gold Reef Resorts.

Gold Reef Is to acquire all the shares in issue with its own newly issued shares. Tsogo Sun runs Montecasino and Suncoast Casino.

A deal worth $2 lbn, involving two local companies is the pending merger between FirstRand’s insurer Momentum and life insurer Metropolitan, to create the third-biggest JSElisted insurer, MMI Holdings.

Also topping R1bn is the R13bn bid by Lexshell 771 Invest for a minority stake in steel producer ArcelorMittal South Africa

Source: Business Report – Ethel Hazelhurst