M&A: Current Trends In The Ghanaian Economy

M&A: Current Trends In The Ghanaian Economy

An acquisition occurs when one entity takes ownership of another entity’s share capital, equity interests or assets.[1] A major difference between Mergers and Acquisitions (“M&A”) is that, in Mergers, a new entity is formed whereas in an Acquisition, the acquiring company retains its original identity.

Today, rather than fold up many businesses consider the option of M&A. The ever-emerging African continent is burgeoning with great demand for business and investment. In the first six months of 2021, there were three hundred and thirty-three (333) M&A transactions in Sub-Saharan Africa worth US$57.7 billion[2]. In comparison, this reflected a 14% increase in the volume of deals with over 90% increase in value of business deals in Sub-Saharan Africa[3]. In the past decade, M&A deals in Africa amounted to US$44 billion[4].

What is the state of M&A in Ghana?

Ghana has a dynamic business atmosphere due to thriving political democracy, economic liberalization and financial deregulation[5].Ghana recorded 14 deals in total for the full year of 2020 reflecting 17% yearly growth thus far[6]. Furthermore, the total deal value for 2020 amounted to US$ 832 million. With these increments, cross border transactions amounted to a larger proportion of deals in Ghana with a total value of US$ 793 million in 2020[7].

Many M&A transactions in Ghana are cross-continent mergers made with American, European and Asian companies. For instance, the Global Africa Investments Africa Management based in Mauritius successfully acquired Movenpick Ambassador Hotel in Accra at the value of US$ 100 million. Similarly, M&A transactions in the telecom industry from 2004 to 2016 was estimated at US$1.92 billion[8].

Other significant M&A transactions in the past decade include[9]:

  • Ecobank merging with Trust Bank in 2000;
  • Access Bank merging with Inter-Continental Bank in 2011;
  • Merger of Airtel with Milicom International Cellular; and
  • Dannex Pharmaceutical acquisition of Starwin products Limited and Ayrton Drugs in 2014 and 2016 respectively.

What laws regulate M&A transactions in Ghana?

A typical M&A transaction among public companies is regulated by legislations such as the Securities and Exchange Commission Code on Takeovers and Mergers 2008 (SEC Rules). Other legislation includes the Companies Act (Act 992). Additionally, there are industry specific regulatory consents that must be sought for a successful M&A transaction such as Securities and Exchange Commission Code on Takeovers and Mergers 2008 (Takeovers Code), the Securities Industry Act, 2016 (Act 929) and the Corporate Governance Code for Listed Companies 2020. The constitution of a company is also a vital document that must be considered when embarking on M&A.

Factors that indicate the need for M&As in Ghana

Research indicates that M&As are highly influenced by economic, regulatory and technological events[10]. In light of technological events, there are instances that a company may lack certain advanced machinery or technology, thus it will be required to merge with another company to adequately serve the prevailing market. Regarding regulatory consents, it is crude knowledge that the prevalence of mundane, ineffective bureaucratic structures and legislations tend to be an aversion for M&A transactions as it creates unnecessary hurdles and delays for businesses. Essentially, the absence of hectic bureaucratic regulatory structures, legislation or thresholds increases the frequency of M&A transactions. In recent years, Ghana has revised her legislation and guidelines to create expeditious and comprehensive M&A transactions.

According to the Bank of Ghana Monetary Policy Report for July 2021, regulatory reliefs and policy measures continued to support the performance of the banking sector thus boosting business transactions such as M&As[11].  These contribute to a thriving economy thereby creating a conducive environment for M&A transactions.

As many businesses have been on this adventurous path, M&A has proven to be the brick and mortar in building the success story of businesses and Ghana’s economy.

This publication may provide a summary of legal issues but is not intended to give specific legal advice. If you require legal advice, please speak to a qualified lawyer, which may include a qualified member of our legal team at B&P ASSOCIATES (info@bpaghana.com).


Michelle Nana Yaa Essuman (Legal Associate)

Emmanuel Ackom Danso (Trainee Legal Associate)

[1] https://online.hbs.edu/blog/post/mergers-and-acquisitions  last accessed 15/11/2021

[2] https://www.africabulletin.com/massive-increase-in-ma-deal-value-in-sub-saharan-africa-in-the-first-half-of-2021/ last accessed 4/03/2022

[3] https://www.africabulletin.com/massive-increase-in-ma-deal-value-in-sub-saharan-africa-in-the-first-half-of-2021/ last accessed 4/03/2022

[4] Goodman AMC LLC, Ghana’s Mergers & Acquisitions Report 2017, Pg. 1

[5] Goodman AMC LLC, Ghana’s Mergers & Acquisitions Report 2017.

[6] https://africaneyereport.com/ghanas-solid-performance-in-mergers-and-acquisitions-in-2020/ last accessed 4/03/2022

[7] https://africaneyereport.com/ghanas-solid-performance-in-mergers-and-acquisitions-in-2020/ last accessed 04/03/2022

[8] Goodman AMC LLC, Ghana’s Mergers & Acquisitions Report 2017, Pg. 5

[9] Goodman AMC LLC, Ghana’s Mergers & Acquisitions Report 2017,1-13(2017)

[10] Mergers, Acquisitions and Corporate Restructurings, Seventh Edition, Chapter 2, page 42. Patrick A. Gaughan

[11] https://www.bog.gov.gh/banking_sect_report/banking-sector-developments-report-july-2021/