Monday, May 20, 2024

Mergers & Acquisitions: A Nigerian Corporate Tale

Last Updated on October 23, 2023


A. Understanding Mergers and Acquisitions (M&A)

Mergers and Acquisitions, often referred to as M&A, stand as strategic maneuvers.

These corporate actions intertwine companies through mergers or the purchase of one entity by another.

M&A is not a mere business transaction but a transformative process.

It reshapes the corporate landscape, fostering growth, and achieving synergy.

These activities can be organic, leading to expansion, or inorganic, enabling a leap into new industries.

M&A deals vary in size and scope, ranging from small-scale acquisitions to colossal mergers.

In Nigeria, M&A plays a pivotal role, fueling economic growth and fostering industry competitiveness.

The Nigerian corporate realm thrives on such transactions.

B. The Significance of M&A in Nigeria

M&A in Nigeria is a catalyst for market consolidation, often propelling companies to the forefront.

It’s a means to acquire new technology, expertise, and customer bases.

In a highly competitive environment, M&A aids companies in improving efficiency, cost management, and leveraging each other’s strengths.

It’s the key to survival and success in the dynamic Nigerian business landscape.

This blog series delves deep into the intricate world of mergers and acquisitions in Nigeria, unveiling fascinating stories and unveiling the strategies that fuel corporate evolution.

Stay tuned for more!

Historical Overview of M&A in Nigeria

A. Early examples of M&A activity in Nigeria

  • In the early 20th century, British companies initiated mergers and acquisitions in Nigeria.

  • The merger of UAC and Lever Brothers Nigeria in 1929 created a major conglomerate.

  • Nigerian Breweries Limited was formed in 1946 through a merger between Nigerian Breweries and Consolidated Breweries.

B. Factors driving M&A in Nigeria

  • Economic reforms in the 1980s and 1990s opened up Nigerian markets to foreign investors.

  • Privatization policies encouraged mergers and acquisitions in the banking and telecommunications sectors.

  • Globalization and the need for Nigerian companies to gain access to international markets drove M&A activity.

C. Key milestones or significant M&A deals in Nigerian corporate history

  1. The acquisition of Ashaka Cement by Lafarge in 2000 marked the largest M&A deal in Nigeria at that time.

  2. In 2001, Vodafone acquired a majority stake in Nigeria’s largest telecommunications company, NITEL.

  3. The merger of Nigerian Telecommunications Limited (NITEL) and Mtel in 2006 created the Nigerian Telecommunications Plc.

  4. In 2017, Access Bank acquired Diamond Bank, creating one of Nigeria’s largest financial institutions.

  5. The acquisition of Forte Oil by Prudent Energy in 2019 marked a significant milestone in the energy sector.

1. Merger of UAC and Lever Brothers Nigeria in 1929

Mergers and acquisitions have a long history in Nigeria, dating back to the early 20th century when British companies initiated such activities in the region.

One of the earliest and most notable examples was the merger of UAC and Lever Brothers Nigeria in 1929.

This merger created a major conglomerate that played a significant role in shaping Nigeria’s corporate landscape.

Throughout the years, various factors have driven M&A activity in Nigeria.

Economic reforms in the 1980s and 1990s opened up Nigerian markets to foreign investors, leading to increased M&A transactions.

The privatization policies implemented during this period also encouraged mergers and acquisitions, particularly in the banking and telecommunications sectors.

Globalization has also played a crucial role in driving M&A activity in Nigeria.

With the need for Nigerian companies to gain access to international markets and compete globally, mergers and acquisitions have become vital strategies to achieve these objectives.

2. The acquisition of Ashaka Cement by Lafarge in 2000

Over the years, Nigeria has witnessed several key milestones and significant M&A deals.

One notable deal was the acquisition of Ashaka Cement by Lafarge in 2000, which marked the largest M&A deal in Nigeria at that time.

Another significant transaction occurred in 2001 when Vodafone acquired a majority stake in NITEL, Nigeria’s largest telecommunications company.

3. The merger of NITEL and Mtel

In 2006, the merger of NITEL and Mtel resulted in the creation of the Nigerian Telecommunications Plc, consolidating the telecommunications sector in Nigeria.

More recently, the acquisition of Diamond Bank by Access Bank in 2017 created one of Nigeria’s largest financial institutions.

The energy sector has also seen significant M&A activity.

In 2019, Prudent Energy acquired Forte Oil, a prominent player in the sector, further reshaping the industry landscape.

These key milestones and significant M&A deals demonstrate the dynamic nature of the Nigerian corporate landscape.

Mergers and acquisitions have been instrumental in shaping the country’s economy and driving its growth.

As Nigeria continues to attract foreign investments and seek opportunities for expansion, M&A activity is expected to remain a key component of its corporate growth strategy.

Read: Strategies to Improve Reporting Accuracy and Transparency

Legal and Regulatory Framework

A. Overview of the legal framework governing M&A in Nigeria

  1. The legal framework governing mergers and acquisitions (M&A) in Nigeria is primarily regulated by the Companies and Allied Matters Act (CAMA).

  2. CAMA provides the legal basis for M&A transactions in the country.

  3. Specific sections of CAMA, such as Sections 590-609, define the procedures and requirements for M&A.

  4. Other legislations that affect M&A transactions include the Investment and Securities Act (ISA), the Nigerian Stock Exchange Rules, and the Federal Competition and Consumer Protection Act (FCCPA).

B. Regulatory bodies and their role in M&A transactions

  1. The Securities and Exchange Commission (SEC) is the primary regulatory body overseeing M&A transactions involving public companies.

  2. SEC ensures compliance with relevant regulations, protects investors’ interests, and reviews merger proposals for the public’s benefit.

  3. The Nigerian Stock Exchange (NSE) also plays a vital role in M&A by providing a platform for listed companies to carry out such transactions.

  4. The NSE ensures that listed companies comply with its regulations and provides a transparent marketplace for M&A activities.

C. Key regulations and requirements for M&A in Nigeria

  • Any proposed merger or acquisition in Nigeria must obtain regulatory approvals from the SEC and other relevant authorities.

  • Companies seeking to merge must comply with the requirements of CAMA, including notifying the Corporate Affairs Commission (CAC).

  • For mergers involving public companies, an offer document containing essential information about the transaction must be prepared and submitted to SEC and the NSE for approval.

  • The FCCPA oversees the competition aspects of M&A, ensuring that such transactions do not result in monopolies or anti-competitive practices.

  • Additionally, foreign companies seeking to invest in Nigerian companies must comply with the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.

  • M&A transactions involving banks and other financial institutions require approval from the Central Bank of Nigeria (CBN).

  • Furthermore, taxation issues should be considered during M&A transactions, and companies must comply with the relevant tax laws.

Essentially, the legal and regulatory framework for M&A in Nigeria encompasses various laws and regulations aimed at ensuring transparency, fairness, and competition in the marketplace.

Key regulatory bodies, such as SEC, NSE, and FCCPA, play vital roles in overseeing and approving M&A transactions.

Compliance with CAMA, as well as obtaining necessary approvals from regulatory authorities, is essential for companies involved in mergers and acquisitions.

Additionally, tax and foreign exchange regulations should also be considered during M&A transactions in Nigeria.

Read: Analyzing Financial Reports: Tips for Nigerian Investors

Nigerian Corporate Culture and M&A

A. Cultural Factors Influencing M&A Decision-making in Nigeria

  1. Importance of relationships: In Nigerian corporate culture, building relationships and trust is crucial for successful M&A deals.

  2. Respect for hierarchy: Hierarchical structures influence decision-making in Nigerian organizations, impacting the M&A process.

  3. Long-term orientation: Nigerians typically prioritize long-term business relationships, which can influence M&A decision-making.

  4. Value of respect and honor: Nigerians place great importance on respect and honor in business dealings, affecting M&A negotiations.

B. How Nigerian Corporate Culture Impacts the Success of M&A Transactions

  1. Building trust and relationships: Nigerian corporate culture emphasizes relationship-building, which can facilitate successful M&A negotiations.

  2. Understanding hierarchy: Recognizing and respecting hierarchy within Nigerian organizations can lead to smoother M&A integration.

  3. Long-term commitment: Aligning M&A strategies with Nigeria’s long-term orientation can enhance the success of transactions.

  4. Fostering respect and honor: Incorporating respect and honor in M&A dealings can improve cooperation and post-merger integration.

C. Challenges and Opportunities Specific to Nigerian M&A Deals

  1. Regulatory hurdles: Navigating complex regulatory frameworks poses challenges for M&A transactions in Nigeria.

  2. Cultural differences: Understanding and bridging cultural gaps is crucial in successful Nigerian M&A deals.

  3. Widespread corruption: Corruption can hinder the transparency and integrity of M&A transactions in Nigeria.

  4. Growth potential: Nigeria’s growing economy offers immense opportunities for M&A deals, especially in sectors like banking, telecom, and energy.

In general, Nigerian corporate culture plays a vital role in shaping M&A decision-making and the success of transactions.

Understanding cultural factors like relationships, hierarchy, long-term orientation, and respect is essential in achieving favorable outcomes.

While Nigerian M&A deals face challenges such as regulatory hurdles and corruption, the country’s growth potential presents significant opportunities for investors.

By embracing and working within the unique Nigerian corporate culture, businesses can navigate the M&A landscape more effectively and reap the benefits of strategic partnerships and acquisitions.

Read: Trends and Predictions: Corporate Finance in Nigeria 2023

Mergers & Acquisitions: A Nigerian Corporate Tale

Case Studies of M&A in Nigeria

A. Notable M&A transactions in different sectors

  1. Telecom Sector: One notable M&A transaction in the Nigerian telecom sector was the acquisition of Visafone by MTN Nigeria, which allowed MTN to expand its network coverage.

  2. Banking Sector: A major M&A transaction in the Nigerian banking sector was the merger between Access Bank and Diamond Bank, creating the largest bank in Africa by customer base.

  3. Oil and Gas Sector: In the oil and gas sector, one notable M&A transaction was the acquisition of ConocoPhillips’ Nigerian business by Oando, which significantly increased Oando’s oil production capacity.

  4. Consumer Goods Sector: An important M&A transaction in the Nigerian consumer goods sector was the acquisition of Cadbury Nigeria by Mondelez International, allowing Cadbury to leverage Mondelez’s global distribution network.

  5. Pharmaceutical Sector: One significant M&A transaction in the Nigerian pharmaceutical sector was the acquisition of Swiss Pharma Nigeria Limited by May & Baker Nigeria Plc, enabling May & Baker to diversify its product portfolio.

B. Motivations, challenges, and outcomes of each case study

1. Telecom Sector

  1. Motivations: MTN Nigeria acquired Visafone to gain a competitive advantage by expanding its network coverage and customer base.

  2. Challenges: Integrating Visafone’s operations into MTN’s existing infrastructure posed technical challenges.

  3. Outcomes: The acquisition enabled MTN Nigeria to strengthen its position in the telecom sector and offer enhanced services to customers.

2. Banking Sector

  1. Motivations: The merger between Access Bank and Diamond Bank aimed to create a stronger and more resilient bank with a larger customer base.

  2. Challenges: The integration of two large banks involved harmonizing systems, cultures, and human resources.

  3. Outcomes: The merger resulted in Access Bank becoming the largest bank in Africa by customer base, improving its market share and financial performance.

3. Oil and Gas Sector

  1. Motivations: Oando’s acquisition of ConocoPhillips’ Nigerian business aimed to increase its oil production capacity and expand its market presence.

  2. Challenges: Managing the transition and integrating ConocoPhillips’ assets required extensive logistical and operational efforts.

  3. Outcomes: The acquisition significantly boosted Oando’s oil production capabilities and positioned the company as a key player in the Nigerian oil and gas industry.

4. Consumer Goods Sector

  1. Motivations: Mondelez’s acquisition of Cadbury Nigeria aimed to leverage Cadbury’s brand and local knowledge while expanding distribution through Mondelez’s global network.

  2. Challenges: Aligning branding, supply chains, and distribution strategies posed integration challenges.

  3. Outcomes: The acquisition allowed Cadbury Nigeria to access global markets and benefit from Mondelez’s expertise in product innovation and marketing.

5. Pharmaceutical Sector

  1. Motivations: May & Baker Nigeria’s acquisition of Swiss Pharma aimed to diversify its product portfolio and expand its market presence.

  2. Challenges: Integrating Swiss Pharma’s operations and products into May & Baker’s existing business required careful coordination.

  3. Outcomes: The acquisition allowed May & Baker to strengthen its position in the pharmaceutical market and offer a wider range of products to customers.

C. Lessons learned from these case studies for future M&A activities in Nigeria

  1. Thorough due diligence is crucial to assess potential synergies and mitigate risks.

  2. Clear communication and stakeholder management are essential to address challenges during integration.

  3. Cultural alignment between merging entities can facilitate smoother integration processes.

  4. Proper planning and project management are crucial to ensure efficient implementation.

  5. Regulatory compliance and approvals should be carefully considered and obtained.

  6. M&A transactions can bring industry consolidation and improved competitiveness.

  7. Continuous monitoring and evaluation are necessary to measure the success of M&A activities.

Read: Ethics in Financial Reporting: A Nigerian Overview

Current Trends and Future Outlook

A. Emerging trends in M&A within the Nigerian corporate landscape

  1. Increased interest from foreign investors in acquiring Nigerian companies.

  2. Growth of cross-border M&A deals, particularly with other African countries.

  3. Rise in technology-driven M&A transactions, especially within the fintech and e-commerce sectors.

  4. Increase in private equity firms actively participating in M&A activities.

  5. Higher focus on strategic partnerships and alliances as a means of achieving growth and expanding market presence.

  6. Growing trend of distressed M&A, driven by the economic challenges faced by some Nigerian companies.

  7. Shift towards more environmentally and socially responsible M&A deals.

  8. Increasing use of earn-outs and other contingent payment structures to mitigate risks in M&A transactions.

  9. Emphasis on talent retention and integration during post-merger integration.

  10. Focus on regulatory compliance, transparency, and corporate governance in M&A deals.

B. Factors that will shape the future of M&A in Nigeria

  1. Government policies and regulations impacting the ease of doing business and foreign investment.

  2. Economic stability and growth prospects of the Nigerian market.

  3. Technological advancements and digital transformation shaping industry landscapes.

  4. Availability of financing options for M&A deals, including venture capital and private equity funding.

  5. Demographic trends and changing consumer behaviors impacting industry dynamics.

  6. Political stability and security situation in Nigeria.

  7. Industry consolidation driven by global competition and market saturation.

  8. Changes in trade policies and international relations influencing cross-border M&A activities.

  9. Investor sentiment and confidence in the Nigerian corporate sector.

  10. Emergence of new industries and sectors offering M&A opportunities.

C. Potential opportunities and challenges for M&A in Nigeria


  1. Access to new markets and resources through acquisitions and strategic partnerships.

  2. Enhanced capabilities and competitive advantage through consolidation.

  3. Expansion of product offerings and diversification of revenue streams.

  4. Access to new technologies and innovation through M&A transactions.

  5. Increase in market share and customer base.


  1. Complex regulatory environment and bureaucratic procedures.

  2. Difficulties in valuation and due diligence of target companies.

  3. Cultural and organizational integration challenges post-merger.

  4. Uncertain economic and political climate affecting deal financing and investment decisions.

  5. Legal and contractual risks associated with M&A transactions.

In short, the Nigerian M&A landscape is experiencing significant changes driven by emerging trends, factors shaping the future, and the potential opportunities and challenges it presents.

As the economy continues to evolve and global dynamics influence the corporate sector, stakeholders must adapt to these developments to navigate the M&A landscape successfully.


M&A plays a crucial role in the Nigerian corporate landscape, offering opportunities for companies to expand, diversify, and increase their competitive advantage.

Through mergers and acquisitions, businesses can achieve synergies, gain access to new markets, and optimize their resources.

However, it is important to note that M&A can also bring about challenges and risks, such as cultural integration issues and regulatory complexities.

Nigerian businesses should carefully evaluate the strategic fit and potential value creation before engaging in M&A transactions.

By understanding the key factors that contribute to successful M&A deals, companies can navigate through the complexities and maximize the benefits.

It is essential for business leaders, investors, and policymakers to continue exploring the dynamics of M&A in Nigerian corporate finance, seeking ways to improve the regulatory framework and fostering an environment conducive to sustainable growth and development.

In closing, M&A presents both opportunities and challenges for Nigerian businesses. It serves as a catalyst for growth, expansion, and value creation.

By embracing M&A as a strategic tool, Nigerian companies can enhance their competitiveness and contribute to the overall economic growth of the country.

Leave a Reply

Your email address will not be published. Required fields are marked *