NIGERIA Law and Practice Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
DealHQ Partners 3B, Dr. Omon Ebhomenye Street Off Admiralty Road Lekki Phase 1 Lagos Nigeria
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1. Market Trends 1.1 Energy and Infrastructure M&A Market The global energy and infrastructure M&A market recorded a strong performance in 2025, character- ised by dynamic deal activity and increasing deal size. In the first half of 2025, deal value surged by 42.2% against the latter half of 2024, despite a 10.7% decline in deal volume, reflecting a shift toward higher- value transactions. Renewables led the growth, with a 10.5% increase in deal volume and a remarkable 384.6% rise in deal value, driven by significant invest- ments across solar, wind and battery storage projects. There were also significant business consolidation activities in the oil and gas sector, where strategic acquisitions focused on efficiency, portfolio diversi- fication and the integration of clean energy solutions. The Nigerian market reflected similar trends as the global market, maintaining strong deal value with notable growth in the upstream petroleum sector, driven primarily by bold government reforms and the increasing participation of indigenous firms acquiring core upstream petroleum assets in the onshore and shallow water terrains of Nigeria from international oil companies (IOCs). Major transactions include: • the acquisition of USD2.4 billion onshore and shal- low water assets of Shell Petroleum Development Company by the Renaissance consortium;
• Oando’s USD783 million purchase of Eni’s Nigerian onshore assets; and • Seplat Energy’s USD800 million acquisition of Mobil Producing Nigeria Unlimited. These deals reflect a wave of local consolidation facili- tated by the government’s positive policy posture and the introduction of favourable fiscal incentives such as cost recovery, royalty adjustments and profit-sharing mechanisms, which have mitigated fiscal risks and improved investment conditions. In the power sector, the enactment of the National Integrated Electricity Policy expanded private sector opportunities in renewables and grid expansion, fur- ther bolstering M&A activity. Despite inflationary pressures posing significant chal- lenges to local lending rates and substantially increas- ing operational and capital costs and complicating deal valuations, Nigerian banks have shown resilience by backing many of the local acquisition activities, supported by approximately USD6 billion in foreign investments and reforms boosting banking capital and lending capacity. Market participants have also resort- ed to enhanced due diligence and pricing adjustments to moderate inflationary risks. Coupled with govern- ment incentives and ongoing liberalisation, investor confidence seems to have been sustained whilst the M&A market seems to maintain its momentum.
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