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Mastercard buys minority stake in MTN’s fintech business

Admire Moyo
By Admire Moyo
Johannesburg, 06 Feb 2024
MTN Group president and CEO Ralph Mupita.
MTN Group president and CEO Ralph Mupita.

Financial services firm Mastercard has concluded the acquisition of a minority stake in mobile operator MTN Group’s fintech business.

In a statement, MTN says it has signed definitive agreements 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 mobile operator says the transaction, which is non-categorised in terms of the JSE listings requirements, was originally announced on 14 August 2023 and is subject to customary closing conditions.

MTN Group president and CEO Ralph Mupita recently indicated that the company was looking to sell about a 30% 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.

In its interim financial results for the six-month period that ended in June, MTN, Africa’s biggest mobile operator, revealed that its fintech business has been flourishing, with revenue growing by 21.7% year-over-year, primarily due to growth in the wallet (+20.7%), payment and e-commerce (+54.9%) and remittance (+78.9%) 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,” 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.”