Even while political upheaval continues across north Africa, there are pockets of investment opportunities in the region. Although merger and acquisition (M&A) activity has all but dried up in Algeria, Tunisia and Libya, Morocco is still seeing investor interest, according to a source working on deals in the country. The Moroccan government has remained stable “because the monarchy introduced constitutional changes”, the source said.

A number of Moroccan companies are cash-rich and looking to invest, the source noted, adding that some entrepreneurs as well as larger corporations are looking to sell companies and/or assets. The size of smaller deals is likely to be between $10m and $30m while larger deals could be up to $300m, he said. However, pricing is a persistent problem. A valuation gap continues between buyer and seller, the source said.


Deal activity is focused on a few key sectors – manufacturing, media, services, security and agricultural sectors – the source said, adding that he expects to see the recent flurry in M&A activity leading to some deals being closed in June.

Indicating that investors are still interested in the country, United Arab Emirates-headquartered private equity firm Abraaj Capital bought a $125m stake in Moroccan insurance holding company Saham Finances in January.

There are also other issues making it difficult for new investors to buy assets in other north African countries. For example, in Tunisia, there is a question mark over whether the assets of the Ben Ali family can be sold, the source explained. After the overthrow of the regime led by President Zine el Abidine Ben Ali, the National Council appointed a company to manage the family’s assets, and accountants were brought in. A year on, these people are still in these positions and ownership of these assets has not been transferred to the state, the source explained. No one has the right to sell them, he said. Ben Ali ruled Tunisia for 24 years and was deposed in January 2011.

Lucia Dore is the head of GCC and Middle East at mergermarket, part of The Financial Times Group. E-mail: lucia.dore@mergermarket.com