Mastercard To Acquire Stake In MTN’s $5.2bn MoMo Unit

Mastercard has signed an agreement with Pan African Telecommunications Group, MTN, to acquire part of its fintech business, MoMo, valued at $5.2 billion.

MTN Group’s CEO, Ralph Mupita, who disclosed this in a statement on MTN’s half-year financial performance released on Monday, said, the signing of the investment agreements is to take place as soon as due diligence is finalised.

Mupita disclosed that the fintech business delivered on its rapid expansion plans in the first half of this year, adding that the volume of transactions increased by 37 per cent to 8.3 billion and these transactions were executed by 61 million active MoMo customers.

“Following the bespoke process to identify and potentially introduce strategic minority investors into MTN Group Fintech, we executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.

“MTN and Mastercard also signed a memorandum of understanding which provides for a minority investment by Mastercard into Group Fintech based on a total enterprise valuation of about US$5.2 billion for the business on a cash and debt-free basis.

“Signing of the definitive investment agreements is expected to occur in the very near term as we approach finalisation of customary due diligence.

The closing of the investment will be subject to customary closing conditions,” he further explained.

On the company’s plan to exit Afghanistan, the CEO disclosed that the process for MTN Group to exit Afghanistan in an orderly fashion through the sale of its entire shareholding to Investcom AF, and affiliate company of M1, remains well on track, adding that, the transaction received conditional regulatory approval to proceed, pending the submission of relevant documentation to the Afghanistan Regulatory Authority.

He said MTN Group delivered resilient results, adding that, “we delivered a resilient performance in H1 23 and made good strategic progress against a tough macro backdrop.

“In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 23 performance than Q1 23. By end-June, MTN South Africa’s network availability was more than 90 per cent despite severe electricity shortages across the country.

“In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 23 and increased inflation. The policy changes implemented in Nigeria in Q2 23 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term.”

Looking ahead, Mupita averred that MTN will keep working to create shared value across our markets. “We are focused on the continued execution of our Ambition 2025, which remains relevant in the current macroeconomic volatility and presents attractive scope for growth. As we manage the challenges in our operating environment, as well as the near-term impacts on our top-line and margins, we maintain our medium-term guidance,” he added.