Myths about Africa : The you-can’t-do-business in Africa myth

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Africa is faced with many challenges. A non-exhaustive list includes: sorting out increased access to education and health; job creation; raising gross income per capita inclusively; gender equality; establishing national and local security; developing global partnerships; tackling child mortality; sorting out power supply and other infrastructure problems; and strengthening public institutions. The public and difficult challenges faced by African countries sometimes leads to the untrue conclusion that it is impossible to create or invest in well-run companies in Africa.

In the articles about the 500 largest companies, 300 innovative companies and 100 VC investors in Africa, I provide examples that contradict these assumptions.

Despite these challenges, entrepreneurs are finding ways to create small cap world class businesses that can be sold to trade and financial buyers. The global market capitalisation for small capitalisation (small cap.) companies is around $900 million or less in equity value.

This is not a frequently told story. In this article I chose to provide give examples of just nine acquisitions below the $250 million bracket, although every year more than 200 deals are done in Africa.

List of Deals

  1. Coca-Cola acquiring Chi Limited
    On 30th January 2016, Coca Cola completed its acquisition of a partial stake in Chi, a Nigerian juice and dairy company. The Lagos based company produced juice and iced tea, along with dairy products and a range of snacks. Mr Nathan Kalumbu, president of Coca-Cola Eurasia and Africa, said that Chi has built a “greatly admired” business, and that they shared the same commitment to investing in Africa.

    The deal begun around the 18th of July when Tropical General limited announced it was willing to sell its stake in Chi Ltd. Coca-Cola moved swiftly to acquire this stake and by December had agreed to acquire the 40% stake in a deal, which also gave them the responsibility of trying to acquire the remaining 60% of the stake within the next 3 deals.

    Around 40% of the stake was sold for 600 million dollars, one of the biggest deals carried out by Coca-Cola. It speaks volumes of the investment Coca-Cola is willing to do in Africa, and shows that Africa is a good place to invest in. A global brand like Coca-Cola investing in Africa is a huge sign that it’s beneficial to invest in Africa.

  2. Tiger Brands Limited acquiring Dangote Flour Mills
    On 7 May 2012, Tiger Brands stated that it would try to acquire Dangote Industries Ltd’s stake in Dangote Flour Mills plc. This is a milling company that is based in Lagos. No further details were disclosed at that time. About two months later, on 4 July 2012, Tiger Brands reached an agreement to acquire 63.35% of the stake in Dangote Flour Mills. The initial offer valued the stake at around NGN 18 billion. On 25 September 2012, this acquisition received approval from the Securities and Exchange Commission of Nigeria. Tiger Brands then signed an agreement to acquire the 63.35 per cent stake in Dangote Flour Mills, and the shares they bought were acquired at a price of 9.50 Naira each. This meant that the total stake went for a total of NGN 30.093 billion. This deal was made in cash and a condition of this sale was that Tiger Brands would make an offer for the rest of the stake in Dangote Flour Mills.
  3. Olam International Limited acquiring OK Foods Ltd
    Olam International acquired OK Foods, announcing it on the 1st of June 2012. OK Foods is a Nigerian based sugar and confectionary manufacturer and it was acquired by Olam International in a deal worth 167 million US Dollars. The Singapore based Olam International saw the potential in the company and moved fast to acquire it.
  4. Kann Consortium acquiring Abuja Electricity Distribution Company
    In 2013, it was announced that Kann Consortium had entered into a deal to acquire 60% of the stake in Abuja Electricity Distribution Company. This deal, worth an eye catching $164 million was split into two parts with $41 million to be paid immediately, within 15 days, while the remaining $123 million were paid over 6 months. The deal was officially concluded on the 1st of October, 2013.
  5. Global Vision Telecom acquiring Intercellular Nigeria Limited
    On 23rd January 2016, South Africa based GVT announced that it would be going ahead with a deal to acquire 51% of Intercellular Nigeria in a deal worth $137.5 million, subject to shareholder approval. This approval was granted within 3 days, and on the 26th of January, the deal was concluded, making it one of the biggest telecommunication deals in Africa that year.
  6. Global Vision Telecom acquiring Prest Cable Ltd
    GV Telecom acquired 60% of the stake in Prest Cable Limited based in Nigeria in 2006. This was a deal worth $125 million, making it one of the largest deals at the time, and showing GV Telecom’s desire to invest in Africa.
  7. Capital Leisure and Hospitality Limited acquiring Nicon Hilton Hotel
    In 2005, the Bureau of Public Enterprises in Nigeria invited investors to express their interest in acquiring a majority stake in Nigeria’s Nicon Hilton Hotel. Eight companies from both inside and outside Nigeria bid for the stake, and Capital Leisure was successful in its bid. They then moved forward to acquire Nicon Hilton hotel in a deal worth 105 million US Dollars.
  8. Helios Investment Partners acquiring Interswitch Limited
    In 2010, Interswitch Limited, a Nigerian based electronic payment service provider announced that it had signed an agreement with Helios Investment Partners, worth $110 million. Helios, based in Britain, acquired 66% of the company, and completed the deal on 25th of January 2010. This deal was another sign of growing interest in doing business in Africa.
  9. Interswitch Limited acquiring Vanso Limited
    Interswitch, under its new British ownership, continued to invest in Africa, acquiring Vanso limited, a payment systems software developer, in a deal worth NGN 15 billion, the equivalent of $80 million. This showed further desire to invest in Africa.


From Coca-Cola to other global brands, there is a growing desire to invest in Africa, and a growing sign that you can invest in Africa and carry out business successfully. This list shows that many companies, both African and from the rest of the world have acquired many successful African brands and invested considerably in Africa. It shows that it is more than possible to carry out a business in Africa, to generate profits and increases in company value at the same time. This shows that Africa is fertile ground for investors, and a great option to invest in.

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Myths about Africa : The you-can’t-do-business in Africa myth

by Editorial Team time to read: 4 min