Due Diligence in Cross-Border African M&A: The Hidden Issues
Cross-border M&A in Africa presents a due diligence challenge that goes far beyond standard legal and financial review. Regulatory approvals, land tenure, related-party exposures, and informal workforce arrangements can all derail a deal post-signing.
Deals that look clean on paper can unravel quickly once local counsel begins digging. In our experience advising on transactions across Nigeria, Ghana, Kenya, and South Africa, the issues that most often surface late — and most often threaten deal value — tend to fall into a handful of predictable categories.
Regulatory Approval Timelines
Competition filings and sector-specific approvals in African jurisdictions often take longer than buyers budget for. Nigeria's Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC) each have their own review timelines, and neither is predictable. Buyers should factor realistic approval periods into their deal timeline and structure MAC provisions accordingly.
Informal Workforce and Labour Exposure
Many mid-market Nigerian businesses operate with a combination of formal employees and contract or casual workers who, under Nigerian labour law, may have employment rights that create significant post-acquisition liability. A thorough workforce audit is essential and should be conducted early in the process.
In African M&A, the risk is rarely in the financial statements. It is in the things the financial statements cannot capture.
GECA's M&A team provides integrated legal, financial, and commercial due diligence that is specifically calibrated to African market conditions. We have completed over $2 billion in cross-border deal advisory and understand where the value risks truly lie.