ZIMBABWE’S corporate deal-making has entered a new era, with local companies now driving the bulk of merger activity as they scramble to consolidate, cut costs and survive an unforgiving economic climate.
Fresh data from the Competition and Tariff Commission (CTC) shows that domestic transactions accounted for 54% of the 22 mergers reviewed during the 2024 cycle, a decisive shift away from years in which foreign capital and cross-border acquisitions stole the spotlight.
The CTC’s latest annual report also notes a marginal dip in overall merger activity, with 22 deals reviewed in 2024 compared to 23 the previous year.
Of these, 13 transactions valued at more than US$164,9 million were approved, down from 16 worth US$201,5 million in 2023. Several 2024 deals were structured as share swaps.
What emerges is a picture of a private sector turning inward — strengthening balance sheets, absorbing weaker rivals, and widening product portfolios as traditional growth paths narrow.
Economists say the rush toward local-to-local consolidation is being fuelled by deep-seated economic distress: currency chaos, relentless inflation and rising operational costs.
“Companies have to find ways to survive,” economist Trust Chikohora said.
Another economist, Farai Chigora, said the numbers reflect a private sector battered by forces largely beyond its control.
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“The economic climate is not favourable. That is why you see the number of mergers decreasing from 22 to 23,” he said.
“Companies are trying to survive through collaboration. What is driving all of this to such an extent is the high inflation we are experiencing, which is perhaps being mishandled.
“The government is controlling the currency as if nothing is changing, maintaining an official rate of ZiG30, but in actual fact, the rate is now far more than ZiG30.
“One could argue that these mergers are pro-inflationary, and that this is a form of body-induced inflation created by these large entities. Conversely, one could also see it as a solution we have adopted, positing that we can improve our situation regarding inflation by embracing these majors.”
Economist Stevenson Dhlamini described the dominance of Zimbabwe-to-Zimbabwe mergers as both rational and defensive.
“These conditions are primarily driven by the need to secure real assets and minimise high transaction costs in a volatile environment,” he stated.
“While this consolidation successfully generates essential private operational efficiencies and builds corporate resilience, it simultaneously presents a significant policy challenge by accelerating the pace toward greater market concentration, which requires careful structural management to prevent undue risk,” he noted.
The CTC echoes these concerns, noting that firms are strategically acquiring local rivals to broaden their portfolios, achieve economies of scale, expand their customer bases and extend their geographic reach.
This marks a break from previous years when offshore suitors from South Africa, Mauritius, and farther afield routinely shaped the mergers landscape.
While foreign interest remains, particularly from Mauritius and South Africa, the defining story of 2024 is that of Zimbabwean corporates consolidating from within.
One standout case is Yokama Investments’ takeover of the collapsed Clover Leaf Panel Beaters, which shut down in 2023.
The acquisition revived a struggling firm, saved jobs, and protected creditors — illustrating how domestic deals can function as corporate rescue tools.
Yet the consolidation wave also poses significant regulatory questions. Horizontal mergers, those between direct competitors, constituted 36% of all transactions reviewed.
Such deals can boost efficiency but also risk shrinking consumer choice and entrenching monopoly power.
“The prevalence of horizontal mergers necessitates vigilant scrutiny,” stated a legal expert specialising in competition law, who spoke on condition of anonymity.
“The CTC must balance the clear benefits — like rescuing failing firms and encouraging investment — with its mandate to prevent the creation of local monopolies or oligopolies that could harm the public in the long term.”
The CTC’s data shows mergers between local entities made up 50% of all transactions, foreign-to-local deals 32%, and foreign-to-foreign transactions involving local subsidiaries 18%.
Mauritius led foreign deal-making due to its favourable tax regime, while South African firms dominated transactions involving subsidiaries, reflecting deep economic ties between the two countries.
Ultimately, Zimbabwe’s merger boom tells a story of corporate pragmatism in turbulent times.
Companies are seeking stability through scale, turning inward for strength as external conditions deteriorate.
The CTC now faces the delicate task of balancing efficiency-driven consolidation with its responsibility to protect market competition and the consumer at the end of the value chain.
