MTN concludes R6.4bn tower deal with IHS
IHS Towers has completed the acquisition of over 5 000 MTN towers in SA, in a deal that will see the New York Stock Exchange-listed tower company fork out R6.4 billion.
MTN announced the completion of the transaction today, saying it received the necessary regulatory approval from anti-trust authorities.
IHS Towers will now own 70% of the SA towers business, with the remaining 30% to be owned by a B-BBEE consortium.
MTN first announced the multibillion-rand sale and leaseback tower infrastructure transaction with IHS Towers last year, as part of the telco’s asset realisation programme.
At the time, MTN said the deal entails the sale and leaseback of 5 709 of MTN SA’s towers – comprising approximately 4 000 greenfield and 1 700 rooftop sites.
Today, MTN announced that under the agreement, IHS Towers will also provide power management services to MTN SA on approximately 13 000 sites, including the acquisition portfolio.
For MTN, the acquired assets, as well as the provision of power management services across MTN SA’s portfolio, are expected to deliver revenue and adjusted EBITDA of approximately $192 million and $85 million, respectively, in the first full year of operations.
“With the regulatory approvals and all conditions precedent to the deal finalised, we are pleased to have IHS bring global capabilities to our South Africa network,” says Ralph Mupita, MTN Group president and CEO.
“Additionally, with this deal, we continue to deliver on our asset realisation programme, strengthening the balance sheet and improving returns.”
Charles Molapisi, MTN SA CEO, adds: “Over the years, MTN SA has built and maintained the best network in the country, and we believe that in IHS, we have found a partner with the necessary experience and expertise to maintain and enhance this critical part of the business.
“This international partnership also brings foreign investment into the market to create greater competition.”
IHS chairman and CEO Sam Darwish says he views the deal as a major milestone in his company’s growth trajectory.
With this acquisition, IHS now has an operational footprint in 11 emerging markets, with seven in Africa, in addition to four in Latin America and the Middle East, with a global tower count of nearly 39 000 towers.
“The closure of this acquisition is an important milestone in IHS’s growth story. IHS was founded in Africa and the region continues to be a key anchor for our company. Through this transaction, IHS has now entered the most industrialised economy in Africa as South Africa’s largest independent tower operator,” says Darwish.
“MTN Group has been a long-term partner of IHS, and I am delighted that we will expand that collaboration and facilitate mobile connectivity in South Africa.
“We will leverage our deep operational excellence and engineering expertise, honed across our other African markets, to meet South Africa’s increasingly sophisticated data demands and expedite the rollout of new technologies.”