Mastercard acquires minority stake in MTN's fintech business

Following this announcement, MTN signed a definitive agreement with Mastercard for a minority investment of up to USD 200 million (R 3.8 billion) into the MTN Group Fintech, with a valuation of USD 5.2 billion (R 99 billion) on a cash and debt-free basis. The transaction is currently subject to customary closing conditions.

More information on the acquisition

The mobile operator mentioned that the transaction represented a non-categorised deal in terms of the JSE listings requirements, and it was originally announced on the 14th of August 2023. At the time of the press release, Mastercard was expected to conclude the investment, as it represented an important step across accelerating their firm’s fintech services. At the moment, MTN has grown by 7% on the Johannesburg stock market since the announcement was made. The size of the fintech shake was not disclosed, as neither was the amount paid by Mastercard. In addition, the USD 5.2 billion estimations excluded cash and debt, while Mastercard’s investment amount was expected to be disclosed later. 

MTN’s fintech structure is expected to include the mobile money platform MoMo, as well as insurance offerings, airtime lending, ecommerce, and network solutions. The Mastercard transaction will give MTN Group the possibility to expand its fintech business, while also focusing on the process of putting the telecoms firm on a solid footing. In addition, MTN will prepare to separate its financial services division as well. 

At the same time, the arrangement is set to complement the larger commercial relationship between the telephony group and Mastercard, aiming to optimise and accelerate the continued development and growth of technology and infrastructure. This procedure is expected to also drive financial inclusion across the African continent. The companies will focus on meeting the needs, preferences, and demands of customers and clients while remaining compliant with the laws and regulations of the local industry. 

In addition, MTN will focus on continuing to explore multiple opportunities for other value partnerships, collaborations, and investments, as well as subject to market conditions with strategic partners and long-term investors.