Mastercard to buy stake in MTN’s $5.2bn fintech unit

MTN Group, Africa’s biggest wireless carrier, said Mastercard agreed to take a minority stake in its financial-technology business, which the company values at $5.2bn.

“Signing of the definitive investment agreements is expected to occur in the very near term,” MTN chief executive officer Ralph Mupita said in a statement on Monday.

Africa’s young, tech-savvy population are increasingly using their mobile phones to bridge gaps in services including banking. That’s opened a lucrative and fast-growing space in the fintech sector for wireless carriers. Much of the attention to date has been on mobile-payment systems, with a wave of fast-growing startups including Flutterwave and Interswitch emerging in the industry.

MTN competitors including Airtel Africa, Nairobi-based Safaricom and South Africa’s Vodacom Group are all at various stages of transforming from basic voice and text mobile use to digitalisation, with a broad aim of separating and monetising the businesses in the longer term.

Airtel has already brought in Mastercard as an investor in its mobile-money unit. India’s Jio Platforms, the digital arm of billionaire Mukesh Ambani’s Reliance Industries, set an earlier precedent by attracting capital from Facebook and Silver Lake Partners in 2020.

MTN has said previously it plans to raise ZAR25bn ($1.3bn) from asset sales. Its most recent disposals include the sale and lease-back of its South African mobile-phone towers and a plan to sell some of its West African assets.

It also has a stake in New York-listed tower owner IHS Holding that it may sell down, although the tower firm’s low trading prices and a dispute with its management has delayed any sale in the near-term.

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