MTN Group, Run by Ralph Mupita, Sell Stake in $5.2-Billion Fintech Unit to Mastercard.
MTN Group Limited, Africa’s largest telecom service provider, led by Zimbabwean senior executive Ralph Mupita, has announced plans to sell a minority stake in its fintech business to global payment systems major Mastercard for $5.2 billion.
The arrangement, which was formalised through a memorandum of understanding, is anticipated to help MTN Group’s fintech services thrive.
MTN Group has consolidated its position as Africa’s largest telecom service provider under Mupita’s leadership, with a subscriber base of over 292 million across 19 markets.
In its most recent financial report for the first half of 2023, the group’s profit grew from R10.4 billion ($544.6 million) to R11.16 billion ($584.4 million), while revenue increased from R97.5 billion ($5.11 billion) to R113.2 billion ($5.93 billion).
The definitive investment agreements are expected to be signed soon after both parties have completed the standard due diligence procedures.
The transaction will be subject to typical closing conditions. Once completed, Mastercard will own a minority investment in MoMo, MTN Group’s fintech business.
MTN Group and Mastercard’s collaboration is set to provide extensive benefits to both consumers and companies.
MoMo users will get access to global payment capabilities, allowing them to conduct international transactions, while businesses operating within the MoMo ecosystem will be able to digitise their payment systems and accept payments from a wider range of customers.
Commenting on the group’s performance, Mupita highlighted the impressive progress made amid challenging market conditions. “Our strategic initiatives have yielded robust results, evident in our improved network availability and operational performance,” he said.
Mupita emphasised South Africa’s excellent network availability record, which exceeded 90% despite widespread power outages. Furthermore, the Group demonstrated its operational prowess in Nigeria, overcoming cash constraints and rising prices to generate a great performance.
The cooperation between MTN Group and Mastercard demonstrates a shared commitment to encouraging innovation and improving financial services accessibility across the African continent.
As regulatory clearances are pending and investment agreements are finalised, stakeholders and customers are excited about the potential of this partnership to shape the future of fintech in Africa.
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