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LEGAL SOLUTIONS THAT MAKE BUSINESS SENSE.
TRANSACTION HIGHLIGHTS:
MERGERS & ACQUISITIONSEQUITY CAPITAL MARKETS
Mergers and Acquisitions
Equity Capital Markets 03
Our Firm 05
Mergers and Acquisitions
Recent Highlights 07
Equity Capital Markets
Recent Highlights 11
Africa-Wide experience 13
Our Team 15
CONTENTS
2
MERGERS & ACQUISITIONS EQUITY CAPITAL MARKETS
We have recently been involved in a number of
noteworthy M&A and ECM transactions across
the continent, which demonstrate our depth of
expertise, and ability to provide flexible, solutions-
orientated and strategic advice. A summary of
recent M&A and ECM firm highlights is enclosed.
Predicting deal activity in the M&A and ECM space
for the coming year is a tricky exercise, but there
are certain to be opportunities and here are some
of the important drivers.
2015 saw the announcement of a number of
global mega-mergers - the one which most directly
impacts Africa, and South Africa in particular, is
the proposed merger of SABMiller plc and AB InBev.
We see this as a countinuing trend in 2016. If such
deals continue to eventuate they, will have a direct
impact on various countries on the continent as
well as help to drive other unrelated deal activity.
This would supplement an already healthy stand-
alone interest in African investment, with certain
jurisdictions obviously being more attractive and
open to investment than others.
Depressed commodity prices and depreciating
currencies also create M&A opportunities,
domestic and cross-border, as many of the listed
companies in some African jurisdictions (including
South Africa) are relatively cheap and thus
attractive for potential domestic and cross-border
suitors.
We anticipate an uptick in interest in the continent
from the private equity sector in 2016. Amongst
other things, disappointing growth in other
emerging markets has helped to retain interest
and maintain activity in higher growth countries
across Africa, as well as lower growth countries in
which it is easier to get deals done.
Based on, amongst other things, recent M&A
transactions that have been announced, the
developmental stage of many countries on the
continent, urbanisation and growing middle
classes, it is anticipated that deal activity in
2016 will be experienced across a wide range
of sectors including retail and consumer goods,
pharmaceuticals, agriculture, education,
telecommunications and financial services. Oil
and gas also presents opportunities as regulatory
regimes in certain countries get bedded down
or stream-lined: developments in this regard in
South Africa have recently been announced in the
media. Clearly, however, the price of oil is critical
to developments in this sector.
“We have “a pan-African scope” to our “corporate practice” and our “ability to service inbound investors and multinationals” has enabled us “to tap into the growth in Chinese and US investment across Africa”.” - Legal 500 EMEA 2015
BOWMAN GILFILLAN AFRICA GROUP
CONTENTS PAGE
3
The geographical source of foreign direct
investment (FDI) also appears to be expanding. We
are seeing lively FDI interest in Africa from North
America, China, Western Europe, Japan and India
to name a few, even when compared to levels of
interest 18 to 24 months ago. Our sense is that the
United States, for one, has become more prepared
to accept the risks and pursue the prospects that
Africa presents and we expect to see more deals, or
at least interest, emanating from the region going
forward.
From a South African perspective, cross-border
opportunities have helped to buttress domestic
activity and keep M&A buoyant, despite a
slowing domestic economy and energy concerns.
We anticipate enhanced activity in this regard
arising from a depreciating ZAR and depressed
commodities markets. It has become well
established that South African deals are, in many
instances, driven by investors who would like
to establish launch pads for broader African
investment. South Africa does not, however, enjoy
exclusive African gateway status. Other African
cities are also gaining or improving their positions
in this regard. Nairobi, where we have a significant
office with more than 100 people, is a notable
example in respect of the East Africa region. Lagos
obviously remains key to Nigerian access but,
in our view, is yet to be seen as a broader West
African gateway.
We advise clients throughout Africa from our
integrated offices in Botswana, Kenya, Madagascar
(for coverage of francophone OHADA jurisdictions
across the continent), South Africa, Tanzania
and Uganda. We also have best friends in Nigeria
and close connections in a number of other
jurisdictions.
This gives us the knowledge, capacity, local
specialist expertise and resources to co-ordinate
cross-border deals in the African countries that are
attracting the most investor interest at present.
We are looking forward to a vibrant year helping
our clients find innovative transactional solutions
and take advantage of the huge opportunities
across the continent.
MERGERS & AQUISITIONS
EZRA DAVIDS
Chairman of Corporate/
M&A Department
CHARLES DOUGLAS
Head of M&A Practice
BOWMAN GILFILLAN AFRICA GROUP
4
OUR FIRM OUR FOOTPRINT IN AFRICA
Bowman Gilfillan Africa Group is a leading Pan-African law firm. Our track record of providing specialist legal services, both domestic and cross-border, in the fields of corporate law, banking and finance law and dispute resolution, spans over a century.
With eight offices in six African countries and over
400 specialised lawyers, we are differentiated by
our geographical reach, independence and the
quality of legal services we provide.
We draw on our unique knowledge of the African
business environment and in-depth understanding
of the socio-political climate to advise clients on
a wide range of technical legal issues. Our aim is
to assist our clients in achieving their objectives
as smoothly and efficiently as possible while
minimising the legal and regulatory risks.
Our clients include corporates, multinationals
and state-owned enterprises across a range of
industry sectors as well as financial institutions
and governments.
Our expertise is frequently recognised by
independent research organisations. Most recently,
Bowman Gilfillan Africa Group was named African
Legal Adviser by DealMakers as well as winning the
Competition and Regulatory Team of the Year and
the IP Team of the Year Awards at the prestigious
African Legal Awards hosted by Legal Week and the
Corporate Lawyers Association.
We provide integrated legal services throughout
Africa from eight offices (Antananarivo,
Cape Town, Dar es Salaam, Durban, Gaborone,
Johannesburg, Kampala and Nairobi) in six
countries (Botswana, Kenya, Madagascar,
South Africa, Tanzania and Uganda).
We work closely with leading Nigerian firm,
Udo Udoma & Belo-Osagie, which has offices in
Lagos, Abuja and Port Harcourt, and have strong
relationships with other leading law firms across
the rest of Africa.
We provide coverage of francophone OHADA
jurisdictions across the continent (including Benin,
Burkina Faso, Burundi, Cameroon, Central African
Republic, Chad, Congo Republic, Democratic
Republic of Congo, Gabon, Guinea, Ivory Coast,
Mali, Mauritania, Niger, Rwanda, Senegal and
Togo) from our office in Madagascar.
Our Kenyan, South African and Ugandan offices
are representatives of Lex Mundi, a global
association, with more than 160 independent law
firms in all the major centres across the globe.
This association gives us access to the best firms
in each jurisdiction represented.
CONTENTS PAGE
5
Bowman Gilfillan Africa Group offices
Relationship firm
Francophone Africa coverage
Significant transaction or advisory experience
BOWMAN GILFILLAN AFRICA GROUP
6
Finance, which increased BRITAM’s current shareholding in the company to approximately 49%. The deal was valued at USD 26.3 million. BRITAM is one of the largest mortgage companies in East Africa and the only mortgage lender listed on the Nairobi Securities Exchange.
Marsh in connection with its multi-jurisdictional acquisitions of the insurance broking and risk services business of Alexander Forbes in Botswana, Malawi, Namibia, Nigeria, South Africa, Uganda, Zambia and potential acquisition in Mozambique.
Metropolitan International, the international division of South African stock exchange-listed financial services group, MMI Holdings, in relation to its USD 31 million acquisition of Kenyan insurer, Cannon Assurance.
Pan Africa Insurance Holdings in relation to its acquisition of a majority stake in Gateway Insurance.
Standard Bank Group in relation to its USD 27.3 million disposal of 10% of its shares in Standard Bank Namibia to employees of Standard Bank Namibia and a community trust, in compliance with regulatory requirements to increase local participation in the financial sector.
Swiss Re in relation to its USD 36 million acquisition of Apollo Investments, the holding company of Life & General Insurance Company in Kenya and the rest of East Africa.
UAP on the acquisition by Old Mutual plc of a controlling stake in UAP from The Abraaj Group, AfricInvest and Swedfund. This was widely reported as the largest deal in East Africa last year.
MERGERS & ACQUISITIONS: RECENT HIGHLIGHTS BY SECTOR
BOWMAN GILF ILL AN AFRICA GROUP
Agriculture
Agri-Vie, the food and agribusiness investment fund, on various investments by the fund in Kenya, Tanzania and Uganda, including its investments in Tanzania Food Corporation, the ultimate owner of a cattle and arable farming venture operating as Mtanga Farms Ltd situated in Iringa, Tanzania; and the poultry and feeds business of Biyinzika Enterprises, Uganda.
COFCO (Hong Kong) in relation to South African competition approvals which are required in respect of its USD 1.5 billion acquisition of 51% of the agricultural business of Noble Agri.
Platform Speciality Products Corporation in respect of its USD 3.5 billion acquisition of 100% of the issued share capital of Arysta LifeScience, a global provider of crop protection and life science products.
Energy
General Electric in relation to competition approvals in respect of the proposed EUR 12.35 billion acquisition of the thermal power, renewable power and grid activities of Alstom.
Financial Services, Insurance and Intermediaries
Affiliated Managers Group Inc. (listed on the NYSE) in the acquisition of a minority equity interest in Abax Investments Proprietary Limited.
British American Investment Co. Kenya (BRITAM) in relation to its acquisition of further shares in the issued share capital of Housing
CONTENTS PAGE
7
Food and Beverages
Brookside Dairy on the group restructuring and sale of 40% of the shares to Compagnie GervaisDanone.
Razco Limited (producer of the Lyons Maid brand of ice cream) in relation to its acquisition of the Ooh! ice cream business of Alpha Dairy Products Limited.
SABMiller plc in the recommended acquisition by AB InBev of the entire issued and to be issued share capital of SABMiller plc. At USD 107 billion (approximately ZAR 1.5 trillion), this is the largest M&A transaction in South African transaction history and the third largest M&A transaction globally at the date of announcement.
“Known for excellent bench strength across the board for M&A and corporate law. Involvement on some of the largest transactions both within South Africa and across the sub-Saharan region. Clients stem from a variety of sectors, including financial services, telecommunications, pharmaceuticals and natural resources.” - Chambers & Partners 2015
SABMiller plc in respect of the proposed combination of The Coca-Cola Company, SABMiller and Gutsche Family Investments’ (majority shareholders in Coca-Cola SABCO) bottling operations in Southern and East Africa to create Coca-Cola Beverages Africa, which will be the biggest bottler of soft drinks in Africa and the tenth largest in the world, with annual revenue of USD 2.9 billion.
Healthcare and Pharmaceuticals
Cipla Limited in respect of its acquisition of 51% of the issued share capital of Quality Chemicals Limited.
Clinigen Group in relation to its acquisition of Link Healthcare, a speciality pharmaceutical and medical technology business focused on the Africa, Asia and Australasia regions.
CRF Pharmaceuticals, an entity listed on the Santiago Stock Exchange, in its proposed ZAR 12.8 billion acquisition of Adcock Ingram Limited.
GlaxoSmithKline in its acquisition of Novartis’s global Vaccines business (excluding influenza vaccines) for an initial cash consideration of USD 5.25 billion, which has created a new world-leading consumer healthcare joint venture with Novartis in which GSK will have majority control and an equity interest of 63.5%; and has divested its Oncology business for an aggregate cash consideration of USD 16 billion.
BOWMAN GILFILLAN AFRICA GROUP
8
Hotels and Leisure
Marriott International in relation to its acquisition of Protea Hospitality Group across seven African jurisdictions for a deal value ofZAR 2.02 billion. In 2014, we received the African Legal Awards’ M&A Team of the Year award in relation to this deal.
Peermont Group in respect of the acquisition of 100% of its ordinary shares, preference shares and mezzanine debt by Sun International, through its wholly owned subsidiary, Sun International (South Africa) Limited.
Mining and Resources
Etex, a Belgian based multinational, in relation to the acquisition by Eternit Building Systems Proprietary Limited, a wholly-owned subsidiary of Etex, of the gypsum operations of LafargeHolcim in Botswana, Mozambique, Namibia and South Africa.
Hulamin in respect of its broad-based black economic empowerment ownership transaction including employees, black management and long standing strategic black partners.
Northam Platinum in relation to the establishment of a broad-based consortium of Historically Disadvantaged South Africans (HDSA), which will hold 31.4% of Northam’s issued shares through a combination of a subscription for new ordinary shares and the acquisition of ordinary shares from the Public Investment Corporation. Upon implementation of this ZAR 6.6 billion transaction, Northam’s total effective HDSA ownership level will increase to approximately 35.4%.
Rio Tinto on various strategic disposals; on the South African aspects of its acquisition of Africa focused Riversdale Mining, listed on the Australian Stock Exchange, and the subsequent sale of its coal assets in Mozambique to International Coal Ventures Private Limited.
Shanduka Group and the majority shareholders in relation to the restructuring of Shanduka Group and merger with Pembani Group Proprietary Limited, to create a new ZAR 13.5
BOWMAN GILFILLAN AFRICA GROUP
9
TRW Automotive Holdings Corporation in relation to competition approvals which are required to implement this global transaction involving its USD 11.7 billion disposal of the entire issued share capital of TRW Automotive Holdings Corporation to ZF Friedrichshafen (through ZF North America).
Telecommunications
Eaton Towers in respect of its acquisition of the tower infrastructure segment of Bharti Airtel in six African countries.
Oger Telecom on its strategic disinvestment of its majority stake in Cell-C to Blue Label Telecoms.
Orange, French telecoms giant, in relation to the disposal of its entire stake in Orange Uganda to Lebanese telecoms operator, Africell Holding.
Safaricom in respect of its USD 83 million acquisition of substantially all the assets of Essar Telecom Kenya (Yu Mobile).
Tata Communications as the controlling shareholder and other shareholders of Neotel, in respect of their ZAR 7 billion disposal of 100% of the issued share capital in Neotel to Vodacom Group. This has been one of the largest deals undertaken in the South African telecoms sector to date.
TE Connectivity Limited and Commscope Inc. in relation to the restructuring of the TE entities in South Africa and the sale of the South African broadband network solutions business unit to Commscope Inc.
“Highly regarded for expertise in M&A and joint ventures, and frequently involved in significant matters for market-leading clients.” - Chambers & Partners 2015
billion black controlled natural resources and industrial holding group.
Oil and Gas
A.P. Møller-Maersk Oil in relation to the acquisition of half of Africa Oil Corporation's shares in three blocks in northern Kenya.
BP in relation to its black economic empowerment transaction in terms of which: (i) Kapela Investments will acquire 20% plus one share; and (ii) the BPSA Education Foundation will acquire 5% of the entire issued share capital of BP Southern Africa.
Halliburton Company, an oil and gas multinational, in relation to competition approvals in various African jurisdictions, including Cameroon, DRC, Egypt, Ethiopia, Kenya, Libya, Nigeria, Tanzania and Uganda, which are required to implement this USD 34.6 billion transaction involving the acquisition by Halliburton Company of shares in Baker Hughes.
Vitol Group and Helios Investment Partners in relation to its acquisition of all Shell’s downstream assets in Guinea and Madagascar.
Retail and Consumer Goods
Continental in relation to South African competition approvals which are required in respect of its USD 1.9 billion acquisition of Veyance Technologies (manufacturer of Goodyear engineered products).
General Plastics Limited, a leading East African packaging manufacturer, servicing major customers in the food, beverage and agro-chemical sectors in a USD 14.2 million investment (made by way of equity and debt) by the African Agriculture Fund (a private equity fund managed by Phatisa).
RCS Card in respect of its acquisition of the JD Group consumer finance business operated by JDG Trading and JD Consumer Finance in South Africa and other smaller JD Group entities in Botswana, Namibia and Swaziland, excluding its insurance operations.
BOWMAN GILFILLAN AFRICA GROUP
10
Healthcare and Pharmaceuticals
Dischem in relation to its proposed IPO.
GlaxoSmithKline plc in its disposal of half of its 12.4% shareholding in Aspen PharmaCare Holdings Limited (approximately 28.2 million ordinary shares). The shares were sold by means of an accelerated book build offering process which resulted in the shares being sold at ZAR 372 per share, raising gross proceeds of approximately ZAR 10.5 billion.
Insurance and Intermediaries
Alexander Forbes Group Holdings in its dual track M&A, and ZAR 9.768 billion IPO process, which resulted in Alexander Forbes Group Holdings listing on the JSE. After announcing its intention to float, the company launched an offer for subscription and a concurrent offer for sale by certain of its existing shareholders to institutional investors and, by invitation, to other selected investors to subscribe for the offer shares in Alexander Forbes Group Holdings.
Mining and Resources
AngloGold Ashanti in its proposed restructuring (demerger) of its current portfolio into separate listed vehicles for each of its South African and international mining operations. Based on the market capitalisation of AngloGold at the time, the demerger was valued at USD 5 billion, in addition to the rights offer of USD 2.1 billion, giving a total deal value of USD 7.1 billion.
Property Funds
Delta Property Fund in respect of various property acquisitions.
The Standard Bank of South Africa (as joint bookrunner) in its ZAR 1 billion private placement of 58 823 529 ordinary shares in the share capital of, and the subsequent listing of the entire issuedshare capital of, Pivotal Fund.
Retail and Consumer Goods
Barclays Capital and ABSA Capital (as joint bookrunners) in a ZAR 18.2 billion rights offer by Steinhoff International Holdings in relation to its listing in Frankfurt. This was the largest rights issue ever completed by a JSE listed company.
Citigroup Global Markets, J.P Morgan Securities and The Standard Bank of South Africa (as underwriters and joint bookrunners) in a ZAR 10 billion rights offer by Woolworths Holdings of ordinary shares in relation to the David Jones acquisition.
BOWMAN GILFILLAN AFRICA GROUP
EQUITY CAPITAL MARKETS: RECENT HIGHLIGHTS BY SECTOR
BOWMAN GILFILLAN AFRICA GROUP
“Ezra Davids leads the firm's involvement in equity capital markets and is seen as a go-to lawyer in this area: He has become the doyen of capital markets for international deals.” - Chambers & Partners 2015
CONTENTS PAGE
11
FTG Holdings in respect of its listing on the Growth Enterprise Market Segment (GEMS) of the Nairobi Securities Exchange. FTG Holdings is the holding company of the Flame Tree Group, a manufacturing group with operations in Dubai, Ethiopia, Kenya, Mauritius, Mozambique and Rwanda. This is the first foreign firm listing in the GEMS market on the NSE.
Special Purpose Acquisition Companies
Capital Appreciation Limited in relation to the first special purpose acquisition company (SPAC) listed on the main board of the JSE.
“They're very good at understanding their role in international transactions, talking the language of international companies and managing the process of the banks.” – Chambers & Partners 2015
“Extensive experience on both debt and equity capital markets matters. Advises both local and international clients in the financial sector, as well as state-owned entities. Recent work includes notable debt issuances and rights offers.” – Chambers & Partners 2015
BOWMAN GILFILLAN AFRICA GROUP
12
We have extensive experience advising on M&A and ECM transactions across the African continent in addition to our ability to manage cross-border transactions in the region. The dark blue areas on this map show the geographical spread of the transactions highlighted in this document.
AFRICA-WIDE EXPERIENCE: MERGERS & ACQUISITIONS AND EQUITY CAPITAL MARKETS
BOWMAN GILFILLAN AFRICA GROUP
CONTENTS PAGE
13
Choice Awards
We won the award for South Africa for 2005, 2006, 2008, 2011 and again in 2015.
African Legal Awards 2015
We received the awards for Competition and Regulatory Team of the Year and IP Team of the Year, 2015.
DealMakers Awards 2016
legal adviser in Africa by both deal value and number of transactions. We were also ranked third in South Africa for mergers and acquisitions by deal value.
AWARDS
Kenya
South Africa
Banking & FinanceCommercial, Corporate and M&AReal Estate and Construction
Commercial, Corporate and M&ACompetitionConstructionLabour and EmploymentProjects and InfrastructureShipping and Transport
BAND 1
THE LEGAL 500 EMEA 2016 RANKED US IN THE FOLLOWING AREAS
BAND 2KenyaDispute ResolutionProjects and Energy
South AfricaBanking & FinanceDispute ResolutionInvestment FundsReal EstateTax
TanzaniaLegal Market Overview
RANKINGSCHAMBERS AND PARTNERS 2016 RANKED US IN THE FOLLOWING AREAS
BAND 1South AfricaCapital Markets: DebtCapital Markets: EquityCompetitionConstructionCorporate InvestigationsCorporate/ M&AEmploymentEnvironmentIT/ TelecommunicationsProjects & Energy
KenyaBanking & FinanceCorporate/ Commercial
UgandaGeneral Business Law BAND 2South AfricaBanking & FinanceDispute ResolutionMedia & BroadcsatingTax
MadagascarGeneral Business Law
57 Recognised Lawyers
2
TIER 1KenyaMining
MadagascarEnergy & Infrastructure
South AfricaCapital MarketsCompetitionEnergyMergers & Acquisitions
UgandaFinancial & Corporate
TIER 2KenyaEnergy Financial & CorporateInfrastructure
South AfricaBankingInfrastructureMiningOil & GasProject Finance
30 Recognised Lawyers 49 Recognised Lawyers
IFLR1000 2016 RANKED US IN THE FOLLOWING AREAS
1 1 1
2
2
14
To view profiles of our team members, please visit www.bowman.co.za.
EZRA DAVIDS Partner, Chairman: Corporate/M&A DepartmentJohannesburg, South Africa Tel: +27 (0) 11 669 9320Email: [email protected]
CHARLES DOUGLAS Partner, Head: M&A PracticeJohannesburg, South Africa
Tel: +27 (0) 11 669 9426 Email: [email protected]
DAVID F.K MPANGA PartnerKampala, Uganda Tel: +256 (0) 41 425 4540Email: [email protected]
JEFFREY BOOKBINDER Partner Gaborone, Botswana Tel: +267 (0) 391 2397Email: [email protected]
JOHN FFOOKS Partner, Head: Francophone AfricaAntananarivo, Madagascar Tel: +261 (0) 20 224 3247Email: [email protected]
PARAS SHAH PartnerNairobi, Kenya Tel: +254 (0) 20 289 9279Email: [email protected]
RICHARD HARNEY PartnerNairobi, Kenya Tel: +254 20 289 9207Email: [email protected]
STELLA NDIKIMI PartnerDar Es Salaam, Tanzania Tel: +255 (0) 22 260 0854 Email: [email protected]
BOWMAN GILFILLAN AFRICA GROUP
OUR TEAM
BOWMAN GILFILLAN AFRICA GROUP
CONTENTS PAGE
15
AntananarivoTel: +261 (0) 20 224 3247
Fax: +261 (0) 20 224 3248
Email: [email protected]
www.jwflegal.com
Cape TownTel: +27 (0) 21 480 7800
Fax: +27 (0) 21 480 3200
Email: [email protected]
www.bowman.co.za
Dar es SalaamTel: +255 (0) 22 260 0854
Fax: +255 (0) 22 260 0868
Email: [email protected]
www.ealawchambers.com
DurbanTel: +27 (0) 31 265 0651
Fax: +27 (0) 86 604 6318
Email: [email protected]
www.bowman.co.za
GaboroneTel: +267 (0) 391 2397
Fax: +267 (0) 391 2395
Email: [email protected]
www.bookbinderlaw.co.bw
JohannesburgTel: +27 (0) 11 669 9000
Fax: +27 (0) 11 669 9001
Email: [email protected]
www.bowman.co.za
KampalaTel: +256 (0) 41 425 4540
Fax: +256 (0) 31 226 3757
Email: [email protected]
www.afmpanga.co.ug
NairobiTel: +254 (0) 20 289 9000
Email: [email protected]
www.coulsonharney.com
Follow us on Twitter:
Bowman Gilfillan Africa Group: @BowmanGilfillan