When a company decides to sell or buy another business, it is rarely a random choice. There is always a reason behind it – a strategy, a pressure, or a vision. For example, in Uganda in 2023, the Sarrai Group made headlines when it acquired 70 percent of Hima Cement Limited from Swiss Holcim for about $84 million.
That deal showed how a local conglomerate bet big on cement and construction by absorbing a major existing player. Even within telecom, MTN announced it would spin off its fintech unit in Uganda so that Mastercard can take a stake – a restructuring move that often precedes a merger or acquisition.
In 2025 overall, global Merger and Acquisition (M and A) activity hit around $2.6 trillion in value, driven by big deals and aggressive growth strategies, according to Dealogic, a financial markets analytics firm.
These deals show that mergers and acquisitions are not random-they are deliberate, high-stakes decisions with big impacts.
Why sell?
For sellers, one common reason is strategy. Businesses evolve just like people do. A farmer may begin by selling raw maize but later realise that milling it into flour makes more sense.
To make that shift, he may sell part of his farm to raise money for a factory.
In the same way, a company may dispose of part of its business that no longer fits its future direction and invest the proceeds in opportunities that align better with its strategy.
Sometimes the issue is that a company owns assets that are not central to what it does. A bank, for instance, may own many plots of land or buildings. Yet banking is not about managing property, and holding such assets is costly and risky. Land can be stolen, paperwork must be checked repeatedly, and time is wasted.
For that reason, the bank may sell those properties and focus on what it does best-banking.
Regulation is another powerful driver. In some industries the cost of meeting legal requirements keeps rising.
A good example comes from Uganda’s banking sector. In 2022, the government raised the minimum capital requirement for commercial banks to Shs150 billion. For big institutions this was manageable, but for smaller ones it was a mountain too high.
The result was exits, licence downgrades, and acquisitions. Afriland First Bank voluntarily left the market, while Opportunity Bank, Guaranty Trust (GT) Bank, and ABC Capital Bank downgraded to Tier 2 credit institutions.
Other small banks came under pressure to merge or sell, while larger players seized the chance to expand. Access Holdings of Nigeria, for example, acquired a stake in Finance Trust Bank as part of its regional growth strategy.
This shows how regulation can force reluctant sales or reshape competitive landscapes.
Uganda’s case is not unique. Globally, banking has often been reshaped by regulatory shocks.
After the 2008 financial crisis, new rules like the Basel III standards forced banks to hold more capital and cut risky lending. For smaller lenders, especially in Europe and the US, survival became harder.
Many merged with stronger institutions. In America, giants like JPMorgan Chase grew bigger after acquiring Washington Mutual and Bear Stearns. In Europe, stricter capital rules pushed smaller lenders into mergers, sales, or closures.
The most dramatic illustration came in 2023, when Swiss regulators brokered the emergency takeover of Credit Suisse by UBS. Credit Suisse, once one of the world’s banking giants, was crippled by scandals, losses, and investor panic.
To prevent a crisis, UBS bought it for $3.2 billion-less than half its $8 billion market value just days earlier.
Overnight, Switzerland lost one of its two banking titans, and UBS became even more dominant.
The deal showed how, in moments of crisis, regulators can compel mergers that reshape entire economies.
As Gertrude Wamala Karugaba, a legal and governance professional with over 20 years of experience in financial services, corporate law, and board leadership across East and Central Africa explains, ‘Owners may be comfortable continuing, but the regulator can force them to reduce their stake or sell entirely to protect financial stability.’
Beyond regulation, the wider economic environment can also drive exits.
‘Inflation may rise, taxes may increase, or profits may shrink. In banking, when too many customers fail to repay loans, banks must set aside large provisions that cut into earnings. If this continues, the business becomes too risky, and selling becomes more about survival than profit,’ Karugaba notes.
Investors also have their own timelines. Private equity firms, for instance, are not meant to stay in a company forever. Their investment horizon is usually five to 10 years, after which they must sell regardless of performance.
Similarly, funds often have strict limits on how much they can invest in one sector or country. Once those limits are reached, they may sell even attractive assets just to comply with policy.
Not all sales are signs of weakness. Sometimes, joining forces with a larger enterprise offers greater strength.
The saying, ‘A small piece of something big is better than a big piece of something small.’ By being absorbed into a larger group, a company may gain access to bigger markets, more customers, and more stability than it could have achieved alone.
Standard Chartered Bank’s exit from some markets, including Uganda, is a good example. The bank did not leave because it was failing. It wanted to focus its resources on corporate clients instead of retail.
From the outside this may look puzzling, especially in a country with a large young population, but for the bank it was simply a strategic shift.
Why buy?
Companies buy to grow. Sometimes growth means entering new markets, and acquiring a business already operating there is far easier than starting from scratch.
Think of a Ugandan company wishing to enter Mozambique. Instead of struggling with new laws, language, and systems, it may simply purchase a local business and build from there.
In other cases, the goal is not geography but capability. A company may want advanced technology, but building it internally could take years. Buying a smaller tech firm gives it instant access to innovation, skilled talent, and an existing customer base.
Growth can also mean resilience. Consider a steel manufacturer that relies heavily on importing raw materials. Every shipment exposes the business to delays, rising shipping costs, and currency swings.
To reduce these risks, the company might acquire a local mine or set up a recycling plant, securing its own supply chain.
A similar idea can be seen in Uganda’s food sector. In 2022, Unga Millers (Uganda) entered into a joint venture with Nutreco International B.V. to form Tunga Nutrition (Uganda) Limited. Unga contributed assets valued at KSh704.1 million in exchange for a 50 percent stake.
The venture revived Unga’s dormant flour mill in Kampala, converting it into a modern feed mill producing animal feeds and concentrates, giving the company a stronger and more resilient base for growth.
The same principle applies in telecoms. Running towers independently may seem attractive at first, but over time the cost of maintenance and depreciation weighs heavily on finances. To fix this, operators often merge tower assets or share networks.
In Uganda, Airtel and MTN, the two largest telecom companies, transferred thousands of their towers to American Tower Corporation (ATC).
Instead of each one struggling to maintain towers separately, this freed them to focus on improving service quality and expanding reach, while shared infrastructure reduced costs and boosted efficiency across the industry.
These examples show that resilience is not only about being big-it is about being smart. Companies are learning that sometimes the fastest way to grow stronger is by sharing, merging, or strategically letting go of assets that weigh them down.
Mergers and acquisitions are about staying ahead.
‘Every business wants to outpace its competitors. One way to do that is to buy rather than build. Some leaders set their sights on being number one or number two in their market, knowing that top position gives them the power to shape the industry.
Others pursue resilience, acquiring businesses that protect them from shocks in supply chains or sudden changes in the economy,’ Karugaba, who currently serves as Group chief legal officer at Equity Group Holdings PLC, notes.
The legal maze
When it comes to mergers and acquisitions, the law is never far away. These transactions do not happen in a vacuum, especially in heavily regulated sectors such as banking, technology, telecoms, and mining.
Every industry has its own rules that shape how a deal can be structured and completed.
Even the type of transaction matters. Is it a share purchase or an asset disposal? Buying shares makes you a full shareholder, but it also means inheriting everything that comes with the company-its obligations, disputes, and liabilities.
Buying assets, on the other hand, lets you select what you want, but raises the question of what value is left behind.
The fine print often hides in schedules and appendices.
As Karugaba cautions: ‘Lawyers sometimes focus on the main body of the agreement and ignore the attachments, but these can be just as critical. Disputes later arise when one party claims something was not disclosed, only to find that it was quietly listed in the schedule-whether it be litigation, employee disputes, or land issues. It is a reminder that in M and A deals, diligence must go beyond the headlines into the small details.’
In Uganda, the Competition Act provides a clear framework for merger control. Part V of the Act sets out what qualifies as a merger, which transactions must be notified, how notification is done, and the criteria the Ministry of Trade uses to evaluate them.
It sets timelines for decisions and clarifies what happens if no decision is made.
As Karugaba explains: ‘For anyone working in financial services, these rules must be read alongside the Financial Institutions Act, which has strict provisions on business transfers, changes in control, and the approvals required for new shareholders in a bank.’
The most famous example of these laws in action was the takeover of Crane Bank by dfcu Bank in 2017. Once Uganda’s third-largest bank, Crane Bank was placed under statutory management by the Bank of Uganda after becoming insolvent.
Using powers under the Financial Institutions Act, the regulator transferred its assets and liabilities to dfcu to preserve stability in the system.
The deal was approved quickly, but it later triggered years of litigation over asset valuation, loan books, and disclosure-showing how regulatory frameworks can both enable and complicate M and A.
The legal picture is not only national but also regional. For years, there was debate about whether the East African Community (EAC) Competition Act applied to Uganda. That debate is now settled.
As of August 2025, the COMESA Competition Commission has been given the mandate to operationalise and implement its regional competition law. Starting November 1, it will begin receiving applications for regional merger approvals.
This means businesses must now think in layers: first Uganda’s local Competition Act, then the EAC framework, and finally the COMESA regulations.
The COMESA rules add further complexity by focusing on whether a transaction has a ‘regional dimension’-a definition that is not always crystal clear.
They also stress that even if a deal does not require regional notification, it may still trigger local requirements.
For companies operating across East and Central Africa, this overlap can be confusing. But it highlights an essential truth: M and A is as much about navigating the legal and regulatory maze as it is about negotiating the commercial terms.
World over, M and A deals reshape industries, protect stability, and sometimes save businesses from collapse.
For sellers, they can mean survival or strategy. For buyers, they are about growth and resilience. For regulators, they are tools to safeguard economies.