Developing Financial Due Diligence Frameworks for Mergers and Acquisitions in Emerging Telecom Markets

• Author(s): Benedict Ifechukwude Ashiedu ; Ejielo Ogbuefi ; Uloma Stella Nwabekee ; Jeffrey Chidera Ogeawuchi ; Abraham Ayodeji Abayomi
• Paper ID: 1708562
• Page: 508-521
• Published Date: 31-07-2020
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 5 Issue 1 July-2021

Abstract

In the dynamic landscape of emerging telecom markets, particularly within Sub-Saharan Africa, financial due diligence (FDD) plays a pivotal role in ensuring the viability and value of mergers and acquisitions (M&A). This draws on practical M&A advisory experience to propose a robust, context-sensitive framework for conducting FDD in telecom transactions across frontier markets. Sub-Saharan Africa presents a unique blend of challenges and opportunities characterized by fragmented infrastructure, fluctuating regulatory environments, inconsistent financial reporting, and substantial growth potential through digital and mobile expansion. Traditional due diligence models often fall short in capturing the complexities of these environments, leading to underestimated risks or missed value drivers. To address this, the review introduces a Tiered Due Diligence Framework (TDF), which organizes FDD into three key layers; Core Financial Health, Structural Integrity, and Future-Proofing. This model reflects real-world insights gained from advising on transactions involving mobile operators, towercos, and fiber infrastructure assets in West, East, and Southern Africa. Each tier is supported by practical diligence tools that reflect local market conditions, such as revenue quality assessment techniques adapted for prepaid-heavy subscriber bases, and spectrum license reviews in jurisdictions with opaque regulatory processes. Through anonymized case studies, the review demonstrates how tailored FDD helped uncover material risks—ranging from overreported subscriber numbers to undisclosed government liabilities—and how strategic advisory can align diligence findings with post-deal value creation strategies. The proposed approach emphasizes cross-functional collaboration, local expertise, and integration of financial, legal, operational, and regulatory perspectives early in the diligence process. In high-risk, high-reward markets like Sub-Saharan Africa, financial diligence must go beyond technical analysis to become a tool for strategic foresight. This framework provides a practical roadmap for investors, advisers, and telecom operators navigating M&A in some of the world’s most promising yet challenging markets.

Keywords

Developing financial, Diligence frameworks, Mergers, Acquisitions, Emerging telecom markets

Citations

IRE Journals:
Benedict Ifechukwude Ashiedu , Ejielo Ogbuefi , Uloma Stella Nwabekee , Jeffrey Chidera Ogeawuchi , Abraham Ayodeji Abayomi "Developing Financial Due Diligence Frameworks for Mergers and Acquisitions in Emerging Telecom Markets" Iconic Research And Engineering Journals Volume 5 Issue 1 2021 Page 508-521

IEEE:
Benedict Ifechukwude Ashiedu , Ejielo Ogbuefi , Uloma Stella Nwabekee , Jeffrey Chidera Ogeawuchi , Abraham Ayodeji Abayomi "Developing Financial Due Diligence Frameworks for Mergers and Acquisitions in Emerging Telecom Markets" Iconic Research And Engineering Journals, 5(1)