Adedapo Adesanya
By Adedapo Adesanya
Financial services firm, Mastercard, has concluded the acquisition of a minority stake in mobile operator MTN Group’s fintech business, MoMo, more than five months after the deal was first announced.
In a statement, MTN said it has signed definitive agreements with Mastercard for a minority investment of up to $200 million into MTN Group fintech at a valuation of $5.2 billion on a cash and debt-free basis.
The mobile operator said the transaction, which is non-categorised in terms of the listing requirements on the Johannesburg Stock Exchange (JSE), was originally announced on August 14, 2023, and was subject to customary closing conditions.
MTN Group president and CEO, Mr Ralph Mupita, indicated that the company was looking to sell about a 30 per cent stake in the fintech business which includes mobile money platform MoMo, insurance offerings, airtime lending, and e-commerce, as well as its network services.
The Mastercard transaction comes as MTN Group is expanding its fintech business, putting the telecoms company on a solid footing, as it prepares to separate its financial services division.
According to the firm, these agreements complement the larger commercial relationship between the telephony group and Mastercard to support the continued development and growth of technology and infrastructure to drive financial inclusion across the African continent.
“This commercial relationship is a key enabler for the acceleration of our fintech business’ payments and remittance services,” the company says.
“MTN will continue to explore opportunities for other value-enhancing partnerships and investments, subject to market conditions, with strategic partners and long-term investors.”
MTN had been trying to unlock value in its financial technology and payments arm amid crippling local power cuts, which have forced it to set aside extensive capital for backup power systems.
It also planned to raise $1.3 billion from asset sales, including the sale and lease-back of its South African mobile phone towers and a plan to sell some of its West African assets.
