SPOTLIGHT #24: Post-M&A Disputes in Africa: Legal Risks and How to Manage Them

SPOTLIGHT #24: Post-M&A Disputes in Africa: Legal Risks and How to Manage Them

Lead up Spotlight #24 focuses on the rise of post-merger and acquisition disputes arising from transactions on the African continent, and the legal risks that buyers, sellers and their advisors must anticipate and manage. Why? Because at Lead up, we are committed to providing our clients with the most innovative dispute resolution solutions and to staying on top of the developments that shape their industries. We share with our colleagues, clients and prospective partners our analysis of a trend that is increasingly central to commercial practice in Africa.

A Sector Under Pressure: Africa’s M&A Activity and Its Legal Aftermath

Africa has been the scene of some of the most consequential corporate transactions of recent years. In early 2026, Egis, a leading European engineering and infrastructure group with over 75 years of presence on the continent, announced the transfer of six of its African subsidiaries (in Cameroon, Madagascar, Senegal, Kenya, Côte d’Ivoire and Rwanda) to a newly formed independent entity, Infras, through a management buyout led by former Egis Africa Managing Director Arnaud de Rugy. Egis described the transaction as a strategic refocusing on large-scale engineering, concession and operational activities, while retaining involvement in 25 African countries.

In 2022, the sale of Bolloré Africa Logistics to MSC for approximately €5.7 billion reshaped the ports and logistics landscape across West and Central Africa. Reporting by the Maritime Executive confirmed that by 2025, third-party legal proceedings had been initiated in France in connection with the transaction, with a coalition of NGOs filing a complaint invoking a 2021 French law allowing proceeds from corruption-related conduct to be redirected to affected communities. In 2024, the proposed BHP takeover of Anglo American, valued at up to approximately £38.6 billion and ultimately withdrawn after three rejections, illustrated the structural and regulatory complexity of transactions involving South African assets, where public interest review frameworks can impose substantial and uncertain conditions on acquirers.

These transactions are significant not only for their scale, but for the legal questions they raise about what happens after a deal closes. Post-closing disputes are an inherent feature of complex M&A, and the African context amplifies the risk: diverse regulatory regimes, governmental concession powers and multi-jurisdictional operations all create exposure that standard due diligence may underestimate. The data confirms the trend: according to the Stockholm Chamber of Commerce, 2024 saw a record 57 post-M&A arbitrations filed in that forum alone, the highest figure ever recorded, with international cases growing steadily year on year.

Contractual Exposure: Where Post-M&A Disputes Arise

Analysis consistently identifies four leading triggers of post-M&A disputes: (i) breaches of representations and warranties (R&W), (ii) earn-out disagreements, and (iii) regulatory and governmental risk.

R&W breaches arise when the acquired business does not conform to the contractual commitments made by the seller at signing, whether as to the accuracy of financial statements, the absence of undisclosed liabilities, regulatory compliance or title to assets. According to the American Bar Association, approximately one-third of post-closing disputes globally arise from alleged R&W breaches. The Bolloré/MSC situation illustrates a related and often underestimated risk: that a buyer may be drawn into legal proceedings arising from the seller’s conduct prior to closing. The scope of R&W coverage and indemnification provisions are the primary tools for managing this exposure.

Earn-out clauses, which make part of the purchase price contingent on post-closing performance metrics, have become increasingly prevalent, estimated to feature in approximately one-third of deals in 2023, up from 21% the year before. Their subjectivity, particularly where metrics are based on adjusted EBITDA, combined with the buyer’s day-to-day control over the acquired business, makes them a reliable source of post-closing contention. The choice between expert determination and arbitration for earn-out disputes is consequential: the two mechanisms produce fundamentally different outcomes, a price adjustment on one hand, compensatory damages on the other, and the right choice depends on the nature of the underlying disagreement.

Regulatory risk, the risk that governmental action affects the value or operability of an acquired business after closing, is a highly relevant element in the context of African M&A (although far from exclusive to M&A deals on the continent). The Tollcam concession suspension affecting Egis and the conditions attached to the proposed BHP/Anglo American transaction both illustrate how the exercise of sovereign authority can trigger claims running into the hundreds of millions, and how the allocation of that risk in the SPA is decisive.

Practical Recommendations

Six targeted steps can materially reduce the risk and cost of post-M&A disputes in African transactions. The table below maps each risk area to the recommended contractual action.

#	Recommendation	Risk Addressed	Key SPA Mechanism
1	Conduct jurisdiction-specific regulatory due diligence	Concession instability; public interest review conditions; local ownership requirements	Scope of R&W coverage and indemnification provisions
2	Draft R&W provisions to cover pre-closing regulatory and compliance exposure	Buyer exposure to seller’s pre-closing conduct; regulatory enforcement actions	Express warranty language covering pre-closing acts; indemnity carve-outs for known regulatory matters
3	Define earn-out metrics with surgical precision	Earn-out disputes arising from vague EBITDA definitions and buyer control of post-closing operations	Detailed metric definitions; reference accounting methodology; illustrative calculations; staged dispute resolution mechanism
4	Anticipate parallel proceedings in your indemnification provisions	Overlapping regulatory investigations, third-party claims and SPA indemnity disputes running concurrently	Defence control allocation; notice and cooperation obligations; indemnity trigger linked to third-party outcome
5	Select a neutral, internationally recognised arbitral seat at the drafting stage	Enforcement risk; jurisdictional uncertainty across multi-country African transactions	ICC, LCIA, CAIP, SCC or Swiss Rules clause; Paris, London, Geneva as seat (New York Convention: 172 states); avg. resolution 209 days (SCC 2024)
6	Coordinate M&A and disputes counsel from the outset	Live or foreseeable concession arbitrations, regulatory investigations or third-party claims affecting transaction structure	Joint due diligence by M&A and disputes teams; SPA liability allocation and dispute resolution provisions drafted with live proceedings in view

Related Lead up Spotlights: Spotlight #22 (force majeure and hardship clauses in energy and infrastructure contracts) and Spotlight #23 (contractual risk and dispute exposure for mining companies facing oil price volatility).

---

Lead up assists companies active in Africa ( across infrastructure, energy, natural resources, logistics and financial services) in managing the legal risks associated with M&A transactions, from due diligence and SPA negotiation to post-closing dispute management and international arbitration. If you are structuring a transaction or navigating a post-closing dispute, contact us at contact@leadup-avocats.com or visit our expertise pages to learn more about our dispute resolution practice.