In anticipation of a 30 percent Capital Gains Tax (CGT) scheduled to take effect on January 1, 2026, Nigeria’s corporate finance scene has recorded a sharp increase in mergers and acquisitions.
Companies are rushing to conclude transactions before the new tax regime takes effect. The rush reflects the material impact the tax is expected to have on transaction costs and post-deal returns.
An investment banking source told BusinessDay that deal activity is set to intensify as the year draws to a close. Several transactions are being fast-tracked to meet internal and regulatory timelines. “In the coming days, before 2025 ends, you will see a lot of corporate disclosures,” the source said.
Deal timelines have shortened considerably. Transactions that typically take six to seven months to structure, negotiate, and close are now being completed within two to three months. Advisory firms have expanded teams and reallocated resources to meet client demand. Legal, regulatory, and due diligence processes are also being run in parallel to save time.
Beyond mergers and acquisitions, 2025 has been active across Nigeria’s broader corporate finance market. Capital raising, short-term debt issuance, and refinancing transactions have all increased. Investment bankers say the overall transaction volumes this year are higher than in 2024.
Another investment banking analyst told BusinessDay that internal reviews point to a busier market in 2025. Commercial paper issuances have played a central role.
Corporations are increasingly using short-term debt instruments to bridge funding gaps and manage working capital. This trend has been supported by a strong investor’s appetite for high-quality corporate paper.
Some of the major M&As in 2025
In 2025, merger and acquisition activity in Nigeria extended beyond the oil and gas sector. While energy remained active, deal flow increasingly reflected transactions across consumer goods, banking, manufacturing, and infrastructure.
Within the oil and gas space, several notable transactions were recorded. TotalEnergies agreed to sell its 40 percent stake in two offshore oil exploration fields to Chevron. Aradel also acquired a 40 percent stake in ND Western, a move that further deepened its exposure to Renaissance Africa.
Outside the energy sector, activity was equally pronounced. UAC Nigeria completed the acquisition of CHI Limited from The Coca-Cola Company for a cash consideration of N182 billion. In the financial services sector, First Holdco divested its stake in FBNQuest Merchant Bank to a consortium operating under the name EverQuest LLC.
Banking sector consolidation also remained on the agenda. The proposed merger between Providus Bank and Unity Bank is expected to be fast-tracked, with regulatory timelines pointing to a first-quarter 2026 completion window.
In the industrial and manufacturing space, Holcim completed the sale of its stake in Lafarge Africa to Huaxin Cement. The transaction, however, has faced delays following a lawsuit filed by some minority shareholders.
Private equity exits also featured prominently in 2025. Helios Investment Partners announced the sale of its 75 percent stake in Axxela. Frigoglass Group also disclosed the sale of its equity interest in Beta Glass to Helios, further underscoring heightened sponsor-led deal activity during the year.
Capital markets activity broadens beyond banks
Despite higher deal volumes, transaction values in 2025 remain below those recorded in 2024. The previous year was shaped by several large oil and gas transactions. These deals significantly lifted headline numbers and masked softer activity in other sectors.
Key transactions in 2024 included Seplat Energy’s $1.28 billion acquisition of Mobil Producing Nigeria Unlimited. Shell Petroleum Development Company was sold to Renaissance Africa for $2.4 billion. Oando also completed a $783 million acquisition of Nigerian Agip Oil Company. Together, these deals defined the scale of Nigeria’s M&A market that year.
Capital raising by banks was another major feature of 2024. The activity followed the Central Bank of Nigeria’s directive on higher minimum paid-up share capital. Banks raised an estimated N3.7 trillion through public offers and rights issues. The exercise generated extensive underwriting, advisory, and execution mandates.
That recapitalisation momentum extended into 2025 on the Nigerian Exchange. Banks have continued to fine-tune their capital structures. At the same time, non-bank corporates have stepped up their participation in the equity market.
Companies such as VFD Group, Champions Breweries, and Ellah Lakes are currently seeking to raise a combined N265 billion. These transactions reflect efforts by corporates to strengthen balance sheets, fund expansion, and refinance existing obligations.
Recent deals further highlight the trend. Presco sought to raise N237 billion from the market. Industrial and Medical Gases Plc secured N5.8 billion. The Initiates Plc (TIP) was also in the market, seeking to raise N1.2 billion.
In total, non-bank corporates are moving to raise more than N500 billion through equity offerings. This signals a growing reliance on market-based funding. Companies are increasingly combining equity with debt instruments such as commercial papers and bonds.
Taken together, these developments have translated into a heavier workload for Nigeria’s investment banking community in 2025. Advisory, capital markets, and structuring mandates have expanded across sectors. The transaction pipeline remains active as the market positions ahead of the CGT implementation in 2026.
