Tuesday, February 20

Mastercard acquires stake in African fintech operator MTN Group

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Mastercard and MTN Group to expand services in Africa

Payments giant Mastercard has reached an agreement to acquire one of the divisions of African company MTN Group. This is the Fintech division. The deal is worth USD 5.2 billion. Payments will be made in two ways: cash transactions and investments in a minority stake in the division. The parties have not disclosed the percentage of securities involved in the deal.
The acquisition of the fintech division is a strategic move for Mastercard to expand in the African market. More and more young people in the region are opting for banking services available through smartphones and wireless connectivity. In this context, the development of fintech solutions has become a promising direction for MTN, a leading mobile operator on the continent. In turn, the collaboration with Mastercard opens up new opportunities to develop its business and increase its customer base.
Following the deal’s announcement, MTN’s share price rose by more than 9 per cent on the Johannesburg Stock Exchange, the best daily gain of the day.
It’s worth noting that the partnership between the African operator and Mastercard began in 2021. At that time, the companies launched a joint project to provide global payment services available in 16 countries in the region.

MTN Group

MTN Business overview

MTN is a South African-based company that provides mobile telecommunications services across Africa and Asia in more than 20 countries. By 2020, it will be the seventh-largest operator in the world. It is the leader in Africa. MTN’s most important market is Nigeria, which has a 35% mobile market share and generates around 30% of all corporate revenues.
Originally called M-Cell, the company was established in 1994. In 2002, the company expanded aggressively in the Nigerian market and maintained a leading position.
Key milestones in the development of MTN:
– 2008 – the company acquired the South African division of US-based Verizon Business, which at the time operated in four other countries in the region in addition to South Africa;
– 2012 – the company became a DSL broadband operator in partnership with Afrihost;
– 2018 – MTN’s Ghanaian division floated on the local stock exchange, listing 35% of its shares. The move was the result of an agreement between MTN and the Ghanaian authorities;
– 2019 – the company provided access to WhatsApp messenger and its own ayoba platform.
In 2020, MTN management made a strategic decision to sell some of its assets in Afghanistan, Syria and Yemen. Some time later, the company also disposed of its 49% stake in Iranian operator Irancell. This was due to the low profitability of the Middle East business. And MTN decided to focus its efforts on other markets.

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