PE Firm Harith to buy 46% stake in SA rival Mergence

BREAKING NEWSOctober 13, 2023 at 11:21 AM UTC

Harith General Partners, a South African private equity firm, has entered into an agreement to acquire a 46% stake in its larger rival, Mergence Investment Managers. This strategic acquisition is expected to facilitate the deployment of their combined assets, totaling 59 billion rand ($3.1 billion), to support infrastructure projects and other investments across Africa.

While financial details of the transaction were not disclosed, the move aims to address the pressing need for increased investment in Africa's infrastructure. Harith's CEO, Sipho Makhubela, emphasized the significance of this deal in promoting Mergence as a financial services business with a focus on infrastructure assets.

The acquisition will enable Mergence to invest in sectors such as clean energy, water, and digital and social infrastructure while expanding its financial services operations into other African nations. This strategic partnership represents a commitment to fueling Africa's growth and development through investment in essential infrastructure projects.

Key Takeaways

Africa's infrastructure needs are indeed substantial, requiring substantial investments to develop essential projects such as roads, power plants, and ports. The African Development Bank estimates that an annual investment of $170 billion is necessary to address these infrastructure gaps. The acquisition of a significant stake in Mergence by Harith reflects a strategic move to pool their resources and expertise to meet these pressing infrastructure needs. Mergence specializes in managing assets in both listed and unlisted markets, offering a range of investment options, including equities, infrastructure, debt, and private equity funds. Harith, with a history dating back to 2006, has a track record of investing in infrastructure projects across eight African countries, including involvement in the largest wind farm on the continent.