African M&A: execution certainty in a more selective market

Written by Ronisha Singh and Walter Miles | Marsh

African M&A in 2026 is telling a more nuanced story than the headlines suggest. The market is indeed rising, but not uniformly, and few practitioners on live mandates would describe it that way. It is the high-quality and best-considered transactions that are thriving. 

Businesses with scale, a believable equity story and a route through financing and approvals are attracting serious interest. This is best evidenced by the divergence between Africa’s 17% drop in deal count in 2025 while also achieving 18% growth by aggregate deal value. The practical point is simple: the market is rewarding preparation and exposing weakly prepared deals much earlier, and that matters for boards, sponsors and advisers alike. 

African dealmaking is being driven by several overlapping themes, rather than a single continental narrative: strategics building regional reach, sponsors backing consolidation in fragmented sectors, and African corporates pursuing outbound and intra-African acquisitions with more confidence than in prior cycles. Energy and fintech deals populated much of the top 10 by value in 2025, with infrastructure, technology, media and telecommunications (TMT), and resources and minerals also being visibly buoyant in the data. And jurisdictionally, certain anticipated leaders continued to secure high levels of investor attention, with South Africa, Kenya and Egypt accounting for 70% of aggregate deal value – although the wide jurisdictional spread outside of these three showed that sophisticated investors can find value across the whole continent. In that setting, risk allocation is not a late-stage legal exercise; in more sophisticated transactions, it often shapes timetables, offers bid differentiation and, ultimately, eases the negotiation pressures between the buyer and seller.

That is most obvious where a strong investment case sits alongside messy execution risk. A buyer may be backing a high-conviction sector and still have to work through fragmented insurance programmes, legacy tax issues, change-of-control provisions, licensing or concession dependencies, local approvals, and management teams that have not been through many institutional M&A processes. None of that is uniquely African, and none of it should deter serious investors. But it does mean the better deal teams are quite deliberate about what risks can be mitigated, what can be priced, and what is better transferred to insurers if momentum is to be preserved.

Against that backdrop, warranty and indemnity insurance (W&I) is no longer novel. Most readers of this publication will know it transfers the seller’s post-completion liability for warranties to the insurance market. The more useful observation is that the W&I market has matured: insurer appetite is broader, underwriting is better informed, and African risk footprints that would once have been treated cautiously are now being quoted by a wide group of credible insurers. At present, there are 15+ insurers with appetite for the continent – more than double the number from 2021 – which has allowed us to drive the rate-on-line down materially across the continent. When used properly, W&I’s benefits as an insurance product, matched by its utility as an execution tool, can help a seller achieve a cleaner exit, support a buyer’s bid, keep liability negotiations from overwhelming the deal, and allow an unfortunate buyer to make a warranty claim without triggering undesirable political or commercial fallout with the warrantors.

But an informed transaction risk discussion cannot stop at W&I, because many of the issues that truly affect value and timing are known issues, rather than unknown ones. That is where tax insurance and contingent risk insurance can be particularly effective. If a specific tax, legal or regulatory issue is distorting negotiations, delaying signing or forcing parties into cumbersome indemnity structures, a well-structured policy can give both sides a workable bridge. Not every transaction needs that solution, but some do, and when they do, it can be the difference between a stalled process and a signable one.

Insurance due diligence remains underutilised in some M&A processes. For private equity investors, insurance due diligence can be key in identifying uninsured risk exposures and hidden liabilities to enhance valuation accuracy, ensure regulatory compliance and help with post-close integration. For strategic buyers, the process can help highlight synergies between the acquired company’s risk profile and the parent company’s insurance structure. It can reveal something about claims behaviour, support purchase price assumptions, assess contractual risk transfer, programme adequacy and governance maturity, and identify hidden cost leakage that may matter for EBITDA resilience after closing. Used properly, insurance diligence should inform purchase price assumptions, SPA strategy, change of control provisions, transition planning and, for sponsors, the value-protection plan through the hold period. 

The lens should then widen further after completion. Portfolio solutions matter where a sponsor holds multiple businesses (especially if this is across multiple jurisdictions) as this typically results in cover inconsistency, mismatched limits, different renewal cycles and uneven governance. Bringing more order to that can improve efficiency, reduce friction at claim time, and give management and investors a clearer view of retained risk. Political risk insurance also remains important in selected jurisdictions, sectors and structures, particularly where value depends on licences, concessions, convertibility, contract sanctity or a public-sector counterparty. 

That, in many respects, is the real evolution in African M&A. The question is no longer whether transaction risk solutions exist for the continent. The better question is how they can be used intelligently across a deal: before bid, during diligence and SPA negotiation, and after completion. That is relevant to inbound capital, outbound African investment and intra-African consolidation alike. In a market where conviction is still there but scrutiny is sharper, the firms that execute best will usually be the ones that combine ambition with clearer risk allocation and fewer avoidable surprises. 

Miles is Head of Transactional Risk Solutions for Middle East & Africa and Singh is Head of Transaction Advisory for Middle East & Africa | Private Equity and Mergers & Acquisitions (PEMA) at Marsh