Merger and acquisition (M&A) activity remained strong in Africa last year, with the value of inbound M&A deals into Africa having increased by 40% from 2024, finds law firm Herbert Smith Freehills Kramer (HSF Kramer).

It was a similar situation for outbound M&A deals from Africa to the rest of the world, with deal values having surged nearly 85% from 2024 to 2025 despite a slight decline in the number of deals.

M&A deal activity from a regional (intra-Africa) perspective did decline in value, however, with fewer megadeals recorded last year compared to 2024 – although deal volume remains relatively flat with 2024, HSF Kramer explains.

Contributing factors to this decline include worldwide geopolitical uncertainty and its economic effects, rising interest rates, making acquisition financing more expensive and ongoing global trade tensions.

HSF Kramer reports that South Africa continues to be the engine room for M&A in Africa, leading the continent in deal value with 35% of total recorded deal value, and Kenya and Egypt accounting for about 20% and 15% of deal value, respectively.

Egypt was the most targeted nation by number of deals with more than 200 deals having been recorded last year, compared with just under 200 in South Africa.

Morocco also experienced notable growth, with nearly 100 deals recorded — about 65% more than in 2024.

In terms of foreign capital investment, Switzerland was the largest inbound acquirer by value in 2025, investing $3.4-billion across six deals, followed by Japan with $3-billion across eight deals. The UK ranked third with $2.7-billion invested across 35 deals. 

HSF Kramer confirms that the US was the most active in terms of number of deals, with the region having been involved in 50 transactions in 2025, followed by France with involvement in 25 deals.

The law firm says the consumer sector remains the most targeted sector for M&A activity, with this sector having recorded more than 180 deals last year.

Energy deals also maintain strong activity, having ranked second in terms of deal value in 2025.

SOCIAL RESPONSIBILITY

Governments across Africa regulate foreign direct investment into their countries much more carefully today than in the past, HSF Kramer states.

In the current investment climate, foreign investment in African countries is often linked to some form of social responsibility to local communities, local industry or the local economy.

There is no universal definition or list of public interest considerations, and public policy goals significantly differ from one jurisdiction to another.

Some countries in Africa welcome foreign investors through various incentives, but increasingly these incentives come with public interest conditions relating to local content or local manufacturing.

OUTLOOK

HSF Kramer expects ongoing worldwide geopolitical uncertainty and its economic effects to continue impacting on M&A transactions in Africa.

The relatively stable inbound M&A activity, in terms of value and number of deals, is testament to investors' trust in the African market, the law firm adds.  

HSF Kramer expects M&A activity to remain strong in 2026 despite the global uncertainty.

“Africa should continue to be seen as a relatively neutral area for critical minerals and energy exports to the US, Europe and Asia, a position reinforced by the recent joint US-EU Statement of Intent on the Lobito Corridor and the US International Development Finance Corporation's $553-million loan to the consortium developing the corridor.”