The world’s second largest payment technology corporation, Mastercard, has concluded the acquisition of the MTN financial technology arm, MoMo.
It will be recall that Mastercard announced plans to acquire a minority stake in MTN Fintech Business six months ago and now the process is completed.
MTN said it has signed a “definitive agreement” with Mastercard for a minority investment of up to $200 million (R3.8 billion) into MTN Group Fintech at a valuation of $5.2 billion (R99 billion) on a cash and debt-free basis.
The telecommunications firm said the transaction, which is non-categorized in terms of the Johannesburg Stock Exchange (JSE) listings requirements, was originally announced on August 14, 2023, and is subject to customary closing conditions.
MTN Group president and Chief Executive Officer, Ralph Mupita, recently indicated that the company was looking to sell about a 30 per cent stake in the fintech business.
MTN’s fintech structure includes mobile money platform MoMo, insurance offerings, airtime lending and e-commerce, as well as its network services.
According to its interim financial results for the six months ended June 2023, MTN, Africa’s biggest mobile operator, revealed that its fintech business has been flourishing, with revenue growing by 21.7 per cent year-over-year, primarily due to growth in the wallet (+20.7 per cent), payment and e-commerce (+54.9 per cent) and remittance (+78.9 per cent) industries.
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.
“MTN will continue to explore opportunities for other value-enhancing partnerships and investments, subject to market conditions, with strategic partners and long-term investors,” the company stated.
The telecommunications firm is the largest operator in Nigeria both in subscriptions and market penetration.
Checks by The Guardian showed that MTN, as of August 2023, based on statistics from the Nigerian Communications Commission (NCC), had 85.9 million customers.
With about 290 million subscribers, MTN as of 2023, operates in 21 countries, including Cameroon, Côte d’Ivoire, Ghana, Guinea Bissau, Liberia, Benin, Nigeria, Rwanda, South Africa, Sudan, South Sudan, Swaziland, Uganda, Yemen, Zambia, Afghanistan, Iran, Syria and Cyprus, among others.
