With more than 20 years’ experience in financial advisory, Sheel Gill, Director, Deal Advisory, KPMG Kenya, talks about the state of Kenya’s mergers and acquisitions market, how it compares to working in the UK, and why due diligence and good chemistry are vital for a successful deal
What are mergers and acquisitions (M&A) and what are the key trends that we should watch for in the Kenyan market?
M&A essentially involves an equity transaction between companies; mergers involve the combination of two or more companies to form a single entity, while acquisitions involve the purchase of an equity stake in a company, be it minority or majority, by another. In this context, the cardinal equation follows that one plus one is greater than two, the rationale being the advantages of pulling together will lead to value creation for all stakeholders.
Some of the trends in the M&A market in Kenya suggest that deal volumes in the financial services sector have shown high growth in recent years, whereas sectors such as manufacturing, tourism and healthcare have not seen significant deal activity. Noteworthy is the banking and insurance sectors in Kenya, which are likely to witness significant deal activity in the near future due to the revised regulatory capital requirements.
Other trends to watch for include exits by private equity firms and growth in the inancerelated technology services sector to increase Kenya’s banked population.
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