M&A Mania: Zimbabwe businesses found love (or at least a good match) in 2023

At the midway point of 2023, Zimbabwe’s Competition and Tariffs Commission (CTC) announced that mergers and acquisitions (M&As) were up by 50% compared to 2022s half-year mark. As is usually the case we were curious to see what was driving this activity and what was pushing the commission which tends to be on the quieter side to make noise about this development.

What activity occurred?

Whilst the CTC is yet to report on which particular transactions went over the line during this period, we know that 12 transactions were approved with manufacturing highlighted as the dominant sector for M&A activity in the first half of the year. This is in keeping with the trends, as M&As in the manufacturing industry have been more common deal types since 2020. 

This trend is unlikely to slow down given that of the 10 merger applications received in the first-half of 2023, 5 of them were in the manufacturing sector. 

There are a few hypotheses put forward for the activity in the manufacturing sector and fragmentation is one of them. Zimbabwe's manufacturing sector is characterized by numerous small and medium-sized enterprises (SMEs). This fragmentation limits individual players' access to resources, economies of scale, and market share. M&A deals offer a way to consolidate the market, creating larger entities with greater reach and efficiency.