transaction highlights: mergers & acquisitions equity...

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

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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

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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


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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.

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5

Bowman Gilfillan Africa Group offices

Relationship firm

Francophone Africa coverage

Significant transaction or advisory experience


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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

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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.


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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


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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.


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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.


EQUITY CAPITAL MARKETS: RECENT HIGHLIGHTS BY SECTOR


“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

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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


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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


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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

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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]


OUR TEAM


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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


www.bowman.co.za

Dar es SalaamTel: +255 (0) 22 260 0854

Fax: +255 (0) 22 260 0868


www.ealawchambers.com

DurbanTel: +27 (0) 31 265 0651

Fax: +27 (0) 86 604 6318


www.bowman.co.za

GaboroneTel: +267 (0) 391 2397

Fax: +267 (0) 391 2395


www.bookbinderlaw.co.bw

JohannesburgTel: +27 (0) 11 669 9000

Fax: +27 (0) 11 669 9001


www.bowman.co.za

KampalaTel: +256 (0) 41 425 4540

Fax: +256 (0) 31 226 3757


www.afmpanga.co.ug

NairobiTel: +254 (0) 20 289 9000


www.coulsonharney.com

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Bowman Gilfillan Africa Group: @BowmanGilfillan

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