Upcoming significant pickup mergers, acquisitions likely due to COVID-19

Most attractive sectors in Africa are technology and infrastructure, says Harding-Jones

The Europe, Middle East, and Africa (EMEA) region has taken a strong leadership position in technology and energy transition, according to Phil Drury, Head of BCMA in the EMEA region at Citigroup.
"We came into this crisis in a strong position as we believe that we will come out of it in a strong position, as we genuinely help our clients," Drury said. "We will continue to invest in three regions that comprise between 40-50% of our wallet in the UK, Germany, and France."
Citigroup plays a leadership role across the region in terms of lead-bank liquidity, and currently has 40 close syndications in the EMEA region. It participates in 26 of these, playing a leadership role in helping out clients in terms of bank-led financial liquidity, Drury added.
He further noted, "We believe that the COVID-19 experience will lead to significant pickup mergers and acquisitions (M&A) in the coming months."
Moreover, Alison Harding-Jones, Head of Mergers and Acquisitions for EMEA at Citi, said that as deals fall across the world. However, a select group of companies that focus on acquisitions are still finding a way to undertake transactions, by taking advantage of surging stock prices.
Harding-Jones added, "Globally, in the first half of the year volumes of M&A reached 47%, with North America recording 64%. The changed landscape will drive M&A to be the response to the challenges presented by COVID-19."
She pointed out that some large technology or health care companies are looking at their rich stock valuations and using that as a currency to pursue growth.
Harding-Jones further added, "I would expect to see more of those deals. Sectors which are most attractive and have potential in Africa are technology and infrastructure, as lately there has been much funding directed to these sectors."
Manolo Falcó, Global Co-Head of Banking, Capital Markets and Advisory, explained that it is difficult to predict what will happen in the second half of the current year. He believes, however, that clients really want significant, speedy solutions, with the result that global banks are the winner out of this.
Regional banks will suffer more than their global counterparts, as they will primarily need to focus on their region. A universal banking model is increasingly becoming the best solution for clients, and now, given the current global health crisis, more than ever.
"European banks have done an excellent job of being very much behind the client, and I think a lot of capital has come out of this work due to the strength of these banks, but I see suffering outside Europe," Falcó disclosed.