Wired for Success? Disputes Avoidance and Resolution for TMT M&A in Africa

Technology, Media, and Telecommunications (TMT) transactions are now a significant part of the mergers and acquisitions (M&A) landscape in Africa. TMT transactions account for around 20% of all M&A and over 30% of the total deal value on the continent. The opportunities in the TMT sector are abundant, but capitalising on them requires navigating a complex disputes landscape.

Understanding the dynamic landscape 

The African TMT M&A landscape has been marked by a steady increase in deal value and volume. In 2024, the total deal value rose by 36% compared to the same period in 2023, outpacing the global increase of 10%. South Africa led the continent with the highest deal value of $3.5 billion, followed closely by Nigeria ($3.4 billion) and then Egypt ($913 million). Further, total deal volume remains steady, compared with the global reduction of 13%; South Africa leads with 118 deals, ahead of Morocco (28), Nigeria (25), Egypt (22) and Kenya (18). The technology sector, particularly enterprise software and SaaS, remained the most active, with significant activity also seen in AI and automation.  

Africa offers a wealth of growth opportunities in the TMT sector. The continent's young population, rising consumer demand, and the need for updated digital infrastructure create a lucrative market for investment. Key drivers of this growth include the expansion of 4G and 5G services, increasing smartphone penetration, and the migration of public services to digital platforms. Additionally, the fintech sector is playing a crucial role in enhancing financial inclusion, with over 40% of Africa's population still unbanked. These factors, along with the rise of AI and e-commerce, are propelling growth in the sector. 

Pick your battles 

While the opportunities are vast, the TMT M&A landscape in Africa is not without its challenges. Potential disputes may arise from various factors, including valuation challenges, breach of warranty claims, and misrepresentation.  

Investing in emerging companies in Africa comes with inherent risks due to their limited historic financial data. This lack of financial history makes it challenging to accurately assess nascent company's value, leading to potential valuation disputes. Additionally, the political, economic, and regulatory environment in Africa is constantly evolving, which can all impact the perceived value of a company, resulting in increased disputes over valuations. Tech deals are often also particularly susceptible to the departure of key employees and the misappropriation of trade secrets which can lead to significant post-M&A disputes. 

Don't play defence 

Seizing opportunities in the TMT sector requires proactive risk management and strategies for disputes avoidance and resolution. A high proportion of M&A deals result in disputes, and digital services remain a leading area for M&A disputes. Anticipating potential disputes and implementing measures to avoid them are critical for a successful outcome.  

• To mitigate the likelihood of disputes, it is essential to adopt best practices during the M&A process. Comprehensive due diligence, clear and precise drafting of contractual terms, and a strong understanding of local contexts are crucial.

• Precision must be deployed in drafting key deal terms. Clear valuation methodologies, in purchase price adjustment mechanisms and put/call option clauses can materially mitigate the risk of disputes post-completion. Dispute resolution lawyers should be involved during the negotiation stage to review key documents and provide their perspective on commonly disputed clauses and risk-prone areas.  

• The importance of well-drafted dispute resolution clauses cannot be overstated to avoid difficulties in bringing claims and enforcing decisions. Arbitration is the preferred method of dispute resolution for cross-border M&A deals to mitigate local court risk, ensure confidentiality of proceedings within a neutral forum and be able to easily enforce any decisions. 

• Adopt a proactive approach to disputes management which involves being prepared for diverse scenarios and early engagement with the relevant business units. Engaging in decision analysis to model outcomes and making strategic decisions, such as opting for arbitration in cross-border deals, can also help manage potential conflicts. 

The TMT sector in Africa offers immense potential for growth and investment. However, navigating the complex disputes landscape requires expertise and proactive risk management. By understanding the trends, leveraging the opportunities, and mitigating potential disputes, stakeholders can successfully capitalise on the growth potential of this vibrant market.

Get in touch 

At HSF, our integrated team of specialist lawyers is well-equipped to help clients capitalise on these opportunities while effectively managing disputes. We have one of the largest and most well-established integrated teams of Africa specialist lawyers across our global network of offices, including Johannesburg. Our experience spans a wide range of practice areas and jurisdictions, having worked on matters in all 54 jurisdictions of Africa. We have close to 1,000 ongoing Africa-related matters across the firm. Our expertise in the sector has been recognised over the last two decades by being ranked Africa-wide TMT by Chambers Global and recently Tier 1 in TMT and IT & Telecoms by Legal 500 in 2025.