It’s a few years since international firms started turning their attention to Africa, when a slowdown in Asia coupled with Africa’s burgeoning middle class and abundant natural resource potential piqued their interest.
How they have tackled the continent has varied, with some choosing to enter via South Africa à la legacy Norton Rose, which took over South Africa’s Deneys Reitz in 2011. Others, like Allen & Overy, Baker & McKenzie and Clifford Chance, joined the rush to Morocco five or so years ago. Some have even taken a network approach, with Dentons, DLA Piper and Eversheds all sealing alliances and associations with indigenous firms in a bid to become a one-stop-shop for Africa.
Regardless of how they have entered, infrastructure, power and oil and gas has been the driving forces behind why they have got into the continent. Yet, as The Lawyer Africa Elite 2016, published today, reveals, having a presence in Africa has not necessarily been of benefit when it comes to acting on the profusion of energy and power deals that have taken place across the continent in the past 10 years.
Indeed, America’s Vinson & Elkins, whose list of seven non-US offices does not include an African base, acted on the most – and highest value of – M&A deals in Africa in the decade to 2015, with the leaderboard containing a mixture of UK, European, US and international players.
When the nationalities of the most acquisitive companies are considered, this makes sense. France’s Total, China’s Sinopec and Italy’s Eni have been among the most active and, given that each make numerous investments around the globe each year, it stands to reason they would instruct lawyers they are comfortable with rather than seek out firms on the basis of where their offices are.
Having an office can be a benefit – Norton Rose Fulbright, for example, has acted on by far the greatest number of renewable energy projects on the continent, with the Deneys Reitz deal going live just as South Africa’s renewable energy independent power producer procurement programme got under way. But, as Wood Group EMEA regional counsel Alastair Moody says, trying to take a pan-continental approach can smack of “empire building”.
With persistently low commodity prices likely to trigger a wave of distressed selling at the same time as the need to power Africa has never been greater, opportunities on the continent abound. But firms pursuing a pan-African strategy be warned: chances are it won’t win you too big a chunk of that work.
