Six months after its initial announcement, Mastercard has finalized the acquisition of a minority stake in MTN’s financial technology arm, MoMo.
MTN disclosed that it has entered into a “definitive agreement” with Mastercard for a minority investment of up to $200 million (R3.8 billion) into MTN Group Fintech, valuing it at $5.2 billion (R99 billion) on a cash and debt-free basis.
The telecommunications giant clarified that this transaction, which was first revealed on August 14, 2023, is not categorized under the Johannesburg Stock Exchange (JSE) listings requirements and is subject to customary closing conditions.
MTN Group President and CEO, Ralph Mupita, previously hinted at the sale of approximately a 30 percent stake in the fintech business, encompassing MoMo, insurance services, airtime lending, e-commerce, and network services.
MTN’s interim financial results for the first half of 2023 highlighted a robust performance in its fintech segment, with revenue growing by 21.7 percent year-over-year, driven by expansions in wallet services, payment and e-commerce, and remittances.
The completion of the Mastercard transaction coincides with MTN Group’s strategic expansion in the fintech domain, positioning the telecom company for future growth and the impending separation of its financial services arm.
MTN emphasized that these agreements reinforce its broader commercial partnership with Mastercard, aimed at advancing technology and infrastructure to foster financial inclusion across Africa.
The company affirmed its commitment to seeking additional partnerships and investments to enhance value, contingent upon market conditions and aligned with long-term strategic objectives.
As Nigeria’s largest operator in terms of subscriptions and market penetration, MTN boasts 85.9 million customers, according to data from the Nigerian Communications Commission (NCC) as of August 2023. Operating across 21 countries, including prominent African markets and other global regions, MTN serves approximately 290 million subscribers, underscoring its significant footprint in the telecommunications sector.
