M&A in Sub-Saharan Africa: Market still sluggish despite recent activity

Deal completion in Sub-Saharan Africa fell to its lowest level in over five years, after companies cut discretionary spend in response to the oil price crash. The average buying price/boe for assets tumbled 65% from the highs of 2014 to just under US$7/boe, as supply outstripped demand and buyers stopped paying upfront for upside. Recent purchases by Woodside in Senegal and PERTAMINA in Gabon raised expectations of a market recovery. But hopes were dampened after Sonangol reneged on an earlier US$1.75 billion deal to buy Cobalt's deepwater position in Angola due to financial constraints. Looking ahead, Shell's planned US$30 billion divestment programme will include fields in Nigeria and Gabon. Total and Eni are considering sales in Congo, and ExxonMobil's impending acquisition of a stake in Mozambique LNG is generating excitement. Assets held by indebted local companies in Nigeria could also be up for grabs.