Weak Deal Flow Drags Nigeria’s Mergers and Acquisitions Down 76%
Nigeria’s mergers and acquisitions (M&A) landscape has suffered a sharp downturn in deal activity and value in 2025, signalling rising headwinds for corporate investors and advisers.
According to the latest Sub-Saharan Africa Investment Banking Review Full Year 2025 report, total M&A transactions involving Nigerian entities plunged by 76% to just $1.3 billion compared to the prior year, underscoring how weak deal momentum has hit Africa’s largest economy hard even as broader regional activity remained relatively stable.
The steep fall in Nigeria’s M&A values came amid a wider slowdown in announced deals across sub-Saharan Africa, where the number of transactions dropped 13.4% to the lowest level since 2005.
While total deal value for the region edged up slightly to $37.2 billion in 2025, driven by sizeable cross-border transactions in economies like South Africa and Kenya, domestic Nigerian mergers and acquisitions suffered disproportionately.
Analysts say a mix of macro-economic uncertainties, currency volatility and tighter financing conditions have dampened corporate confidence and constrained deal flow in Nigeria.
Challenges such as foreign exchange instability and weak exit markets for private investors have been cited in related investment landscape assessments, contributing to investor caution and slower deal execution.
Despite the pullback, Nigeria retained its position as one of the top M&A destinations in sub-Saharan Africa, ranking fourth by target value. This suggests that while overall deal sizes shrank and fewer transactions closed, strategic interest in Nigerian assets persists among select global and regional buyers.
The decline in deal activity was not uniform across sectors. Regionally, consumer staples and energy remained focal points for big transactions, with blockbuster deals such as Coca-Cola’s multibillion-dollar acquisition of its South African bottling operations and major spirits business purchases in East Africa dominating headlines.
These high-value deals helped buoy overall Africa figures, even as smaller and mid-market transactions faltered in markets like Nigeria.
Market observers believe the current M&A slump may be temporary, driven mainly by cyclical pressures and broader global economic headwinds. If Nigeria can stabilise macro-economic indicators, enhance currency policy clarity and boost investor confidence, dealmaking could rebound later in 2026. However, for now, the 76% drop serves as a stark reminder of the structural and financial hurdles still facing corporate transactions in the country’s economy.
This downturn in merger activity has deep implications for the capital markets, private equity exits and corporate restructuring strategies in Nigeria, pushing dealmakers to be more selective and cautious, even as opportunities remain for well-positioned strategic buyers.
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