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Tech and Telecom sector in Africa to boom in 2018; says a report

Moreover, M&A activity in the tech and telecom sector is forecast to rise significantly across all regions in 2018.

Devdiscourse News Desk | Updated: 19-03-2018 11:27 IST | Created: 19-03-2018 10:45 IST
Tech and Telecom sector in Africa to boom in 2018; says a report
telecommunications in Africa (Image credit: wiki.)

According to a report published by Baker McKenzie's Global Transaction Forecast, Mergers and acquisitions (M&A) activity in the technology and telecommunication sectors in Africa and the Middle East will more than quadruple in 2018, from 2017.

The report reveals that M&A was valued at USD 1.2 billion in 2017 in the telecom and tech sector which is forecasted to hit up to USD 5.9 billion in 2018 and a further USD 5.9 billion in 2019, before falling to USD 3.9 billion in 2020.

The key elements driving investment in tech M&A around the world, as well as in Africa are a more positive global economic outlook, the expansion of technology across industries, investment from emerging markets, and strong corporate balance sheets, says the report.

"Africa's growing telecoms infrastructure and access to online services and platforms continue to improve access to the online economy. Increased local demand for innovative products, services and solutions drive offshore telecommunications and technology companies to target opportunities in Africa. The growing financial services sector has also seen domestic banks make significant investments in technology to advance their innovation agenda. African tech companies are also targeting offshore investments in companies that will deepen their access to new technologies, markets and talent explains Darryl Bernstein, Head of the Technology, Media and Telecommunications (TMT), Practicing at Baker McKenzie in Johannesburg, South Africa.

The deal activity in the technology and telecommunications sector is also expected to pick up the pace all over the world with North America leading the race with transactions totaling USD 243 billion, followed by the Asia Pacific with USD 108.3 billion, Europe with USD

106 billion and Latin America with USD 4.9 billion. Moreover, M&A activity in the tech and telecom sector is forecast to rise significantly across all regions in 2018.

Matthew Gemello, an M&A partner at Baker McKenzie based in Palo Alto says, "Top talent continues to be an important driver in technology acquisitions, We are seeing fewer pure 'acqui-hires' as compared to prior periods in the last 10 years, but the overarching need remains paramount from a competitive perspective."



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