SOUTH AFRICA Trends and Developments Contributed by: Ezra Davids, Tholinhlanhla Gcabashe, Nanga Kwinana and Cathy Truter, Bowmans
Foreign Direct Investment Framework The Protection of Investment Act ensures that foreign investors are treated no less favourably than South African investors in like circumstances. Critically, South Africa does not operate a general FDI screen - ing regime. Although the Competition Act provides for national security screening by a presidential commit - tee for notifiable mergers involving foreign acquirers and critical infrastructure, these provisions are not yet in force and there is no anticipated effective date. Notwithstanding the absence of a general screening mechanism, investors must carefully consider sector- specific regulatory frameworks. A number of industries are subject to tailored restrictions: domestic control requirements apply in the air services sector; foreign ownership in commercial broadcasting is capped; and mining, financial services and telecommunications impose fit-and-proper and change-of-control approv - als that often interact with B-BBEE ownership targets. Sector-specific advice should therefore be obtained at an early stage of any transaction. The M&A Market in 2026 Global M&A activity entered 2026 with renewed momentum, yet the market is defined less by exuber - ance than by selectivity. After several years of mac - roeconomic volatility, persistent geopolitical tension and elevated financing costs, dealmakers are pursu - ing strategic transactions with greater discipline and sharper scrutiny of execution risk. Boards and inves - tors are prioritising durability, regulatory preparedness and long-term value creation. South Africa reflects many of these global dynamics through a distinctly local lens. Domestic deal activity continues to be shaped by evolving competition regu - lation, transformation imperatives, exchange control reform and sector-specific policy developments. The market is characterised by measured confidence. The most effective dealmakers in 2026 are those capable of balancing commercial ambition with regu - latory acumen, stakeholder engagement and long- term strategic positioning. The emphasis has shifted decisively from speed and scale to execution certainty and adaptability.
Energy remains among the strongest drivers of South African deal activity. Secondary sales of operational renewable portfolios, minority stake disposals and institutional capital deployment into de-risked con - tracted assets have defined transaction flow. The market’s defining constraint is no longer capital avail - ability but grid access. Consolidation in renewables is expected to continue, with battery storage emerging as a parallel growth theme. Mining M&A is shifting from traditional scale-driven consolidation toward strategic, value-led transactions shaped by geopolitical developments, supply chain security and commodity exposure. Elevated gold pric - es act as a near-term catalyst, while access to critical minerals such as copper and platinum group met - als underpins the energy transition. M&A continues to provide an alternative to slower, capital-intensive greenfield development. Portfolio optimisation, divest - ments of non-core assets and jurisdictional diversifi - cation have driven considerable activity. Financial technology and digital payments represent one of the most active areas of M&A in South Africa. Major banks and financial institutions have acquired fintech businesses to secure proprietary technology, reduce third-party dependency and expand digital offerings. South African banking groups continue to pursue disciplined regional expansion, particularly into East African markets. Domestic players continue to record strong growth through advanced technology and operating models. Healthcare remains attractive, with portfolio optimi - sation and multinational capital redeployment driving deal flow. In telecoms and digital infrastructure, activity is con - centrated in fibre networks, tower portfolios and data centres, with investors targeting scalable, wholesale- oriented platforms. Technology-driven transactions continue to dominate strategic priorities, with artificial intelligence, cybersecurity and digital infrastructure assets remaining highly sought after.
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