Viwe Tlaleane
14 March 2007
Johannesburg — ERNST & Young's annual mergers and acquisitions survey provides a handy reading of the temperature of the local investment market. Of course, the figure that mergers and acquisitions last year increased 5% to R284bn needs to be read with some caution because this includes deals announced but not concluded.
So last year's figure includes Brait's R14bn offer to buy Shoprite, even though the opposition to this deal is staunch and the transaction might very well fail. But another interesting aspect to the announcement is the rankings of investment advisers and legal advisers -- and this year's table illustrates some distinct changes to the power base.
Of course, some of the top faces remained. Deutsche Securities repeated their success last year of heading the advisory table with 11 deals worth R66bn, and Rand Merchant Bank dropped a spot to third this year, followed by JPMorgan. Nedbank Capital remained their dependable selves, racking up the highest number of deals.
However, it was the appearance of some of the hitherto forgotten names that will have surprised some. Citigroup, which has built up a formidable and underrated presence in SA, vaulted from 37th to second on the list, and pan-African advisory group First Africa climbed from 21st to seventh.
Other big gainers were KPMG (from 20th to ninth) and Bravura (from 50th to 19th). Going the other way were Goldman Sachs, which dropped from sixth to 13th, Morgan Stanley (seventh to 17th) and Absa Capital, which fell from fourth to 15th.
When it came to legal advisers, Bowman Gilfillan underlined its recent rise by climbing to the top position from 13th last year, while Werksmans climbed to fourth from 16th.
If anything, these rankings are a useful proxy to illustrate the growing (or waning) powers of the individual companies, and the flight of intellectual property around the top firms.
But if anything, the chopping and changing at these firms is likely to gain pace in future, reiterating the contention that what's hot this year won't necessarily be so next.
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