Top deals making headlines this week

In focus this week: Murray & Roberts, Naspers, PepsiCo, Clover, Momentum Metropolitan and more.

Murray & Roberts

South Africa’s competition authority has recommended that the proposed long-standing acquisition of Murray & Roberts (M&R) by Aton be prohibited.

The Competition Commission found that the merging parties are close competitors and that deal will result in the removal of their closest and strongest competitor. M&R has, like other major construction groups in South Africa, been facing severe headwinds due to falling private and public spending on infrastructure and other construction projects. Read more here

Naspers

Naspers, Africa’s largest technology company by market capitalisation, said it would invest $30 million (R422 million) in Brainly, a peer-to-peer learning community for students, parents and teachers. Brainly said its latest round of funding, including the investment by Naspers, will be used to enhance its user experience and create the next generation of the platform. Additionally, funds will help expand its user base in the US, a key market for the company. 

“We have been impressed by Brainly's growth over the past 10 years, particularly in the US and high-growth markets like India, Indonesia, Turkey and Brazil," said Larry Illg, CEO of Naspers Ventures in a statement.

Momentum Metropolitan

South Africa-based insurer Momentum Metropolitan Holdings plans to acquire the short-term insurance business of financial services group Alexander Forbesfor around R1.94 billion.

Momentum Metropolitan, which recently changed its name from MMI Holdings, said the unit had identified short-term insurance as an area where it wanted to invest for growth. The acquisition is expected to immediately double Momentum’s retail client base. Read more here

Grit 

Grit Real Estate Income Group announced the acquisition of a hotel resort in Senegal for €11.6 million, growing its exposure in another sub-Sharan Africa region.

Grit currently owns and operates real estate assets in seven African countries including Kenya, Morocco, Zambia, Botswana, Mauritius, Mozambique and Ghana. The resort in question is Club Med Cap Skerring, and Club Med, which is the seller, has agreed as part of the deal to expand and renovate the hotel for €25 million. Read more here

PepsiCo 

A wholly-owned subsidiary of US multinational food, snack and beverage corporation PepsiCo has given notice of its firm intention to make an offer to acquire the issued ordinary shares of South African packaged goods company Pioneer Foods, the two said on Friday.

The deal is worth about R25.4 billion. In a joint statement, the companies said the transaction was one of PepsiCo’s largest acquisitions outside the United States and a demonstration of its belief in South Africa’s potential and of its long-term commitment to the country. Read more here.

Clover 

South Africa’s Competition Commission has approved, with conditions, the sale of branded foods and beverages group Clover Industries to a consortium led by Tel Aviv-based Central Bottling Company.

Clover said that the R4.8 billion deal has been approved by the competition authority and recommended to the Competition Tribunal. According to Clover, the conditions relate to, among other things, employment and local procurement “which were part of the investment case for [the consortium.]) Milco SA. The conditions applicable to the implementation of the Clover scheme are acceptable to both parties”. Read more here

Anheuser-Busch InBev

Anheuser-Busch (AB) InBev, which has a secondary listing on the JSE, has agreed to sell its Australian subsidiary Carlton & United Breweries to Asahi Group, a beer and soft drink company based in Tokyo, Japan for an enterprise value of $A26,0 million.

The company is looking at ways to reduce its enormous debt load, which amounted to about $102.5 billion in 2018. AB InBev's deal with Asahi should help tackle that, with "substantially all of the proceeds" directed to pay down debt, it said. Under the terms of the deal, which is expected to close by the first quarter of 2020, AB InBev will grant Asahi the rights to commercialize the portfolio of AB InBev's global and international brands in Australia.

Vunani 

Independent black-owned and managed diversified financial services group Vunani said on Wednesday that it had been approved for a secondary listing on alternative stock exchange platform, A2X Markets.

Vunani, which last week announced plans to graduate to the Johannesburg Stock Exchange’s (JSE) main board, said its shares would be available for trade on the platform from July 31. Vunani will retain its listing on the JSE and its issued share capital will be unaffected by the A2X move. 

Read more here.

Safari Investments 

South Africa-based shopping mall owner Safari Investments said it had received a R1.8 billion cash buy-out offer from Community Property (Comprop).

The offer, if implemented, would put a cash price of R5.90 per Safari share, which represents a 36 percent premium to the R4.35 closing price on Friday July 19. JSE-listed Safari owns seven malls in South Africa and one in Namibia, the Platz am Meer mall in Swakopmund. It also owns a private day hospital in Soweto. Read more here.

AJ Capital and Investment LLC

AJ Capital and Investment LLC (AJCI), a Dubai-based private equity firm, has acquired a majority stake in Kenyan start-up micro-insurer, Insurance For All (IFA) Ltd, for undisclosed value.

AJ Capital and Investment LLC, the investment arm of Al Jallaf family, said to be one of the most influential business families in Dubai, said it will inject undisclosed cash into supporting IFA’s expansion drive and marketing initiatives after purchasing a 51 percent shareholding.

The global value of deep-pocketed AJCI, which announced its entry in Kenya in February through a Sh20 million sponsorship for renovation of a dormitory at the Starehe Boys Centre, is estimated at $8 billion (Sh830.08 billion).