MTN Group will spin off fintech operations in Nigeria, Ghana, and Uganda to enable Mastercard’s minority stake acquisition. The fintech unit is valued at $5.2 billion, with Mastercard potentially investing $200 million. MTN reports a 35% rise in mobile-money transactions and exceeds dividend expectations.
MTN Group Ltd. is set to divest its financial technology operations in Nigeria, Ghana, and Uganda in the first half of the year. This strategic reorganization aims to facilitate a partnership with Mastercard Inc., which seeks to acquire a minority stake in these growth-oriented units. As per Chief Executive Officer Ralph Mupita, this separation is essential to finalize the agreement established with Mastercard in 2023.
With Africa’s youthful and tech-savvy populace increasingly utilizing mobile services, the fintech sector has seen substantial growth for telecommunications companies. MTN reported a notable 35% increase in mobile-money transactions, which exceeded $320 billion in constant currency terms. This expansion highlights the company’s potential in the growing digital finance landscape.
Mastercard’s proposed investment could reach up to $200 million, with the valuation of MTN’s fintech unit estimated at $5.2 billion. The transition is further along in Uganda and Ghana, whereas Nigeria presents more complexities due to additional regulatory challenges, as noted by Mupita.
Furthermore, MTN is interested in network sharing arrangements, reflecting trends observed in European telecommunications markets. The company, recognized as Africa’s leading carrier by sales, has announced a dividend of 3.45 rand (0.19 cents) for 2024, surpassing analysts’ expectations of 3.35 rand. An increased dividend of at least 3.70 rand per share is anticipated for the current financial year, as communicated in the recent statement.
In conclusion, MTN Group’s plan to spin off its fintech operations marks a significant move aimed at facilitating a partnership with Mastercard. This strategic shift highlights the burgeoning opportunities within Africa’s digital finance ecosystem. As MTN navigates regulatory complexities, it simultaneously reinforces its market leadership through enhanced dividend offerings, reflecting a strong financial performance and commitment to shareholder value.
Original Source: businessday.ng
