Africa’s mergers and acquisitions market recovered in 2026 as the value of deals involving African targets or acquirers rose 19% through July, although transaction volumes fell sharply, according to Boston Consulting Group.

Deal value reached $11.6 billion in the first seven months of the year, up from $9.7 billion in the same period of 2025, while the number of transactions fell 32% to 200 from 294, BCG said in its 2026 M&A Report.

The figures point to a recovery driven primarily by a small number of large transactions rather than a broad increase in dealmaking across the African market.

Only three transactions valued at $500 million or more had been announced through July, compared with nine in each of the previous two full years. Those three deals were worth a combined $8.7 billion, accounting for about 75% of total Africa-linked deal value, BCG said.

The remaining 197 transactions were worth about $2.9 billion in total, significantly below the comparable period in 2025.

BCG said the concentration of deal value in a small number of transactions has characterized African M&A for more than a decade, reflecting a market with less depth and critical mass than more established regions. What has changed in 2026 is the size of the largest transactions.

The average value of deals worth at least $500 million more than doubled to $2.9 billion through July, from $1.1 billion in the same period of 2025. By comparison, the average size of smaller deals was broadly unchanged at about $14 million.

The pattern mirrors a wider global M&A recovery in which large transactions have returned while smaller deal volumes remain subdued. BCG said global deal value rose about 19% over the same period, while global transaction volume declined 16%.

Inbound investment was a major feature of Africa M&A 2026, with deal value targeting African companies rising 63% to $7.8 billion through July, from $4.8 billion a year earlier.

At the same time, deal value involving African acquirers dropped 44% to $4.7 billion from $8.3 billion. The figures cannot be added because transactions between African companies are counted in both categories, BCG said.

The shift marks a reversal from 2025, when outbound African dealmaking had been comparatively resilient. In 2026, foreign strategic and financial buyers increased their activity in African assets, while African companies and investors reduced acquisitions outside the continent.

Materials and mining accounted for roughly three-quarters of the value of deals targeting African companies, making it the largest source of inbound M&A activity.

The largest transaction was South32’s agreement to sell five aluminium value-chain assets to Alcoa for an estimated $5.5 billion, including Worsley Alumina, Hillside Aluminium, the MRN bauxite mine and Brazilian alumina and aluminium operations. The agreement was announced in June and remained pending, according to the report.

Alcoa separately disclosed an upfront consideration of about $4.1 billion, comprising cash and shares, with additional contingent consideration potentially taking the transaction’s value higher.

Energy was another important sector for inbound investment. In July, ADNOC Distribution agreed to acquire Shell’s South African downstream retail-fuel business for $1 billion, continuing a pattern of Gulf-based national oil companies expanding their downstream presence in Africa.

Norway’s Panoro Energy also paid $167 million to increase its stake in Equatorial Guinea’s Ceiba field and Okume oil-producing complex to 54.6% from 14.25%.

Private equity also accounted for a larger share of Africa-linked M&A value in 2026.

PE-linked deal value nearly tripled to $2.9 billion through July, from $1 billion in the same period of 2025. However, the number of PE transactions declined to 46 from 58. PE-linked deals represented roughly one-quarter of total Africa-linked deal value, compared with about one-tenth a year earlier.

Financial investors were particularly active in real estate, with South Africa’s Vukile Property Fund among the prominent buyers.

In financial services, Sanlam Maroc completed an approximately $277 million acquisition of Allianz Maroc, while Morocco’s Ayrad Group completed a $150 million acquisition of Luxembourg-based investment advisory business Osead Fund.

BCG’s M&A Sentiment Index, which measures dealmakers’ willingness to transact about six months ahead, stood at 83, up from 79 at the start of 2026 but below its long-term average of 100.

The report said dealmaking confidence remains concentrated in large transactions and sectors including artificial intelligence, energy and digital infrastructure. Those areas also overlap with Africa’s position in energy-transition projects, mining supply chains and digital connectivity.

The report also highlighted additional uncertainty from the conflict in the Middle East. Gulf sovereign funds and state-backed companies remain important investors in Africa, but continued regional instability could lead them to become more selective in deploying capital, particularly toward strategically important assets.

BCG said Africa’s demographic expansion, urbanisation and digital adoption continue to support long-term investor interest. The continent’s role in energy-transition and critical-minerals supply chains could also attract strategic buyers.

However, the 2026 figures show that the recovery remains concentrated. With African acquirers also pulling back from overseas transactions, the breadth of M&A activity has not expanded at the same pace as headline deal value.