Interest in the continent from UK and global firms set to continue with Nigeria tipped as growth hot spot

News over the summer that Linklaters is in exclusive talks with South Africa's Webber Wentzel about a potential tie-up marks the latest demonstration of the growing interest in Africa from UK and international firms.

The pair plan to form an exclusive alliance similar to the magic circle firm's deal with Australia's Allens, consisting of a formal referral agreement alongside one or more joint ventures, with both partnerships expected to vote on the arrangement imminently.

One potential joint venture would see Linklaters and Webber Wentzel share the costs associated with new office openings across Africa, with both firms interested in Nigeria and several other locations across West Africa.

The proposals underline how increasing numbers of firms are looking to the emerging market – rich as it is in natural resources – for growth opportunities as the European markets continue to stagnate.

Traditional strengths such as mining, oil and gas, alongside newer areas such as renewable energy and telecommunications, are attracting growing interest from European investors as well as those from China, India and South America.

Norton Rose South Africa managing director Rob Otty (pictured) said: "There has been a second wave of interest by European companies that recognise they can't let opportunities in Africa drift towards the east.

"After the eurozone crisis and the market slowdown, UK and global firms saw the return clients were making in African jurisdictions and realised, 'Hang on, that's where we have to be'."

While much of the initial interest has been in South Africa, where Norton Rose's merger with local firm Deneys Reitz went live in June 2011 and where Eversheds and DLA Piper both have presences through tie-ups with local firms, interest is now broadening across the region.

A host of UK firms have poured into Francophone Africa, where Allen & Overy (A&O), Clifford Chance and Norton Rose all have bases in Casablanca, while Eversheds has a co-operation agreement with a local practice.

Bird & Bird has an exclusive alliance in Tunisia and Herbert Smith is planning to open in Guinea.

Elsewhere, Clyde & Co formed a best-friend relationship in Zimbabwe last year, while a number of leading firms are keen to open in Nigeria. 

A&O Africa desk head Tim Scales said: "Nigeria has been growing at impressive rates in recent years and has massive potential, even if it has significant infrastructure challenges, in particular with respect to power and transportation."

Shawn der Kinderen, Freshfields Bruckhaus Deringer's corporate partner and head of sub-Saharan Africa, added: "We will continue to see interest in Africa grow – whether it will be on the scale of a merger, an alliance or some other form of co-operation."

South African firms are also building pan-African strategies, with ENS recently launching in Rwanda and Burundi.

Commenting on the interest outside South Africa, Werksmans director and Lex Africa chairman Pieter Steyn added: "Nigeria is a growing investment destination, as it is the economic superpower of West Africa.

"It has a rapid growth rate and its economy might overtake South Africa in the near future. Its banks and private sector are also very active outside Nigeria."

Steyn further identified Kenya, Ghana and Angola as significant growth hubs.

For more, see Linklaters in exclusive alliance talks with South Africa's Webber Wentzel.

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