Evolving M&A practices in Africa: How SPACs offer a compelling alternative

Vivien and Phetha noted that Special Purpose Acquisition Companies (SPACs) have gained global traction as an alternative route for companies to go public, bypassing the traditional IPO process. However, they acknowledged that SPACs are still relatively underutilised in Africa’s M&A landscape.

They emphasised the significant potential for SPACs in Africa, driven by the increasing demand for capital in high-growth sectors such as fintech, infrastructure, and natural resources. This trend is complemented by a rise in private equity activity and cross-border deals. Vivien and Phetha also highlighted the importance of understanding how SPACs are structured in Africa, their unique advantages, and the challenges they face, bolstered by real-world examples.

Key challenges in adopting SPACs in Africa include regulatory uncertainty, limited market depth, and political and economic instability. Despite these hurdles, Vivien and Phetha believe that with the right structuring SPACs could play a transformative role in consolidating industries like technology, renewable energy, and real estate, offering exciting prospects for the continent's M&A landscape. As demand for innovative capital solutions grows, Vivien and Phetha encourage stakeholders to explore this evolving opportunity and consider how SPACs might redefine M&A practices across Africa.

Click here to read their article.