MTN Begins Talks With Local Investors Over 30% IHS Stake

By Adedapo Adesanya

MTN Group is discussing with domestic investors to acquire a 30 per cent stake in IHS Nigeria Plc, as agreed with the Federal Competition and Consumer Protection Commission (FCCPC) and the Nigerian Communications Commission (NCC).

According to Bloomberg, the deal could raise between $900 million and $1.1 billion, citing people with knowledge of the matter. The details are still private.

Earlier this week, the NCC and the FCCPC approved MTN’s proposed $2.2 billion acquisition of IHS Towers. However, it came with a condition.

The regulators noted that MTN cannot keep 100 per cent of IHS Nigeria but must sell a 30 per cent stake in the Nigerian branch to local Nigerian investors at a fair market price.

“MTN will sell down 30 per cent of IHS Nigeria to local Nigerian investors, on an arm’s-length commercial basis and subject to market conditions,” MTN said earlier this week.

IHS Towers provides tower infrastructure to multiple telecom operators, raising concerns that MTN’s ownership could place competitors such as Airtel Nigeria and T2mobile at a disadvantage. The local sell-down is intended to address those concerns while ensuring that Nigerian businesses and investors retain a stake in critical telecommunications infrastructure.

The clause is designed to protect local competitors and prevent a single foreign company from gaining control of critical infrastructure. It also enables local businesses and investors to acquire equity stakes in essential national infrastructure, including telecommunications towers.

The acquisition will see MTN transition from being a minority shareholder in IHS to a full owner. It will also see IHS exit from the New York Stock Exchange and become a wholly owned subsidiary of MTN.

The Nigerian tower operator is the biggest asset for New York-listed IHS Holdings Limited and operates about 18,000 mobile-phone towers.

The proposed merger first came to light in early February when MTN disclosed its plan to acquire the remaining 75 per cent stake in IHS Holdings to investors. The Nigerian government, however, said it wants to assess the proposed acquisition regarding its future impact on the Nigerian telecoms industry.

In addition, the Minister of Communications, Innovation, and Digital Economy, Mr Bosun Tijani, explained that the review is to ascertain its impact on the long-term sustainability, investor confidence, and performance of the industry.