During the first half of 2026, South Africa's business confidence reached multi-year highs before moderating amid escalating global uncertainty. Despite this softer sentiment, the country retained its position as Africa's leading M&A market by deal value.
The increase in domestic and inbound transactions has been boosted by a commodity price upswing and infrastructure liberalisation in the mining, technology and financial services sectors.
The country's removal from the FATF grey list and a credit-rating upgrade have also contributed to investor confidence, with legislative reforms assisting to boost market sentiment.
Consolidation and portfolio reshaping are the focus
A series of large transactions across a range of sectors in the last year has revealed that investors are focusing on consolidation strategies and portfolio reshaping.
Notable transactions include Old Mutual’s R2.2bn acquisition of a majority stake in 10X Investments, signalling consolidation in the investment management sector.
In mining, the proposed $53bn merger between Anglo American plc and Teck Resources has positive implications for South Africa’s critical minerals sector.
In healthcare, Sana Bidco’s £1.7bn acquisition of Assura plc and Life Healthcare’s $750m disposal of Life Molecular Imaging to Lantheus Holdings revealed the sector’s investment appetite for defensive assets. Aspen Pharmacare’s AU$2.37bn disposal of its APAC is an example of the increasing focus on multinational capital redeployment.
Mining: critical minerals are central
Mining transactions have revealed a move towards strategic positioning around critical minerals and supply chain security, with investors targeting the commodities needed for the energy transition and AI-driven digital infrastructure.
Merger control under the Competition Act, particularly the public interest framework, alongside the need for exchange control approval and sectoral licensing requirements, have all impacted transaction structure, timing and execution risk.
Anthony Norton 10 Jul 2025 Fintech and digital payments transactions are on the rise
In the last year, major banks and financial institutions have acquired fintech businesses to secure technology, reduce third-party dependency and expand digital offerings. Aggregate spending by banks on fintech acquisitions reportedly exceeded R7bn.
Transactions included Capitec’s acquisition of Walletdoc, Nedbank’s investment in iKhokha, FirstRand’s acquisition of Optasia and Lesaka’s acquisition of Bank Zero.
Transactional banking, payment processing and digital wallets have become highly competitive investments, with financial institutions looking to internalise their digital systems and boost their technology capabilities.
Regulatory reforms in the sector included the South African Reserve Bank’s changes to the national payments framework, which will allow non-banks to participate more directly in clearing and settlement systems, lowering the barriers to entry and increasing competition.
Banking transactions are focusing on regional expansion
South African banking institutions are pursuing regional expansion strategies, with an emphasis on East Africa. Cross-border expansion enables banks to diversify earnings and support shareholder returns in a competitive domestic environment.
Notable deals include Absa’s acquisition of Standard Chartered’s retail and wealth business in Uganda and Nedbank’s proposed acquisition of a controlling stake in Kenya’s NCBA.
Energy: connection rights are key
Investment in this sector is increasingly defined by operational resilience and compliance with the regulatory framework, with secondary sales of operational renewable portfolios and minority stake disposals providing liquidity to early-stage sponsors.
Institutional and infrastructure capital has focused on acquiring de-risked, contracted assets. The strongest prices are found in the projects backed by corporate PPAs or established procurement frameworks because investors prefer the stable cash flows in a higher-rate environment.
The market’s defining constraint is grid access. Transmission bottlenecks and the restructuring of Eskom have resulted in connection rights being the primary value driver in transactions.
Deal documentation now precisely allocates grid delay and curtailment risks.
On a positive note, regulatory reform under the National Energy Regulator of South Africa has normalised private generation and wheeling structures, with contracts increasing the due diligence focus on multi-party risk allocation.
Consolidation in renewables is likely to continue, with battery storage fast becoming another growth area.
Tamara Dini, Richard Bhagwan-Bryce, and Nazeera Mia 12 May 2026 Telecoms and digital infrastructure: licensing, competition and public interest risk in the spotlight
Deal flow in the telecoms and digital infrastructure sector has been concentrated in fibre networks, tower portfolios and data centres rather than traditional mobile operator consolidation.
Investors are targeting scalable, wholesale-orientated platforms with predictable cash flows, while incumbents are opting for carve-outs, co-investment structures and asset monetisations. Capital is being deployed into resilient, long-duration assets.
The Independent Communications Authority of South Africa has played a critical role in spectrum allocation, licence transfers and ownership approvals, and spectrum-sensitive M&A is therefore highly technical.
Competition law scrutiny has also intensified, particularly in fibre-to-the-home and tower markets. Public interest and empowerment commitments are now embedded early in deal structuring.
Transactions that proactively manage licensing, competition and public interest risk are materially more likely to progress.
Recent regulatory reforms
The country’s merger control regime, governed by the Competition Act 1998, is being reformed.
New mandatory merger notification thresholds and associated filing fees came into effect on 1 May 2026, which will reduce the volume of notifiable transactions at the margins, alleviating compliance costs for smaller and mid-market deals in the short term and, over time, easing caseload pressure within the competition authorities.
The Commission has also issued guidelines for pre-merger filing consultations. This is particularly notable for complex M&A transactions as it offers parties an opportunity to engage with the Commission at an early stage, reducing delays and procedural inefficiencies in the formal review process.
The Commission's approach to public interest conditions has also evolved. While employment and historically disadvantaged persons ownership outcomes remain central, the Commission has adopted a more flexible stance in recent months.
Rather than prescribing ownership restructuring in every notifiable transaction, there is increasing acceptance of bespoke undertakings tailored to the specific transaction, sector, and business context.
Broad-based black economic empowerment (B-BBEE) compliance, together with draft reform and the introduction of the Transformation Fund, continue to shape the structure and execution of M&A in South Africa.
Proactive engagement with evolving B-BBEE codes and sector-specific targets is key to maintaining competitiveness and accessing procurement opportunities.
Last word
For investors and corporates that combine strategic clarity with regulatory acumen, South Africa offers institutional depth, legal certainty and a reform trajectory moving decisively in the right direction.
However, complexity in the form of logistics challenges, evolving competition and public interest scrutiny, B-BBEE compliance imperatives and a shifting governance landscape require rigour and foresight from investors.
