MTN Group has
announced plans to spin off its financial technology (fintech) operations in
Nigeria, Ghana, and Uganda during the first half of 2025. This reorganization
will enable Mastercard Inc., a global payments giant, to acquire a minority
stake in these high-growth fintech units.
The
announcement was made by MTN CEO Ralph Mupita during an interview with
Bloomberg on Monday. The spin-off is a key step in finalizing a deal struck
with Mastercard in 2023, which values MTN’s fintech unit at $5.2 billion.
Mastercard is expected to acquire a stake worth up to $200 million as part of
the agreement.
The spin-off
process is part of MTN’s broader strategy to streamline its operations and
focus on its core telecommunications and fintech businesses. While the spin-off
processes are more advanced in Uganda and Ghana, Nigeria presents additional
regulatory complexities.
“Nigeria has a
bit more complexity with some more regulatory processes to work through,” said Mupita. Despite these challenges, MTN remains committed to
completing the reorganization across all three markets, underscoring its
dedication to driving innovation and growth in its fintech operations.
The deal with
Mastercard, announced in 2023, marks a significant milestone for MTN’s fintech
ambitions. Under the agreement, Mastercard will support the acceleration and
growth of MTN’s payments and remittance services while acquiring a minority
stake in the fintech unit.
“Following the
bespoke process to identify and potentially introduce strategic minority
investors into MTN Group Fintech, we executed commercial agreements with
Mastercard to support the acceleration and growth of our fintech business’s
payments and remittance services,” MTN stated in
2023.
The signing of
definitive investment agreements is expected to occur soon, pending the
finalization of customary due diligence and regulatory approvals.
MTN’s fintech
operations have been a key driver of growth for the company, offering a range
of services including mobile money, payments, and remittances. By spinning off
these operations and partnering with Mastercard, MTN aims to further expand its
fintech offerings and enhance its competitive edge in the digital payments
space. The collaboration with Mastercard is expected to bring advanced payment
solutions, global expertise, and innovative technologies to MTN’s fintech
platforms, benefiting millions of customers across Africa.
In addition to
its fintech ambitions, MTN is exploring network-sharing agreements, a strategy
already prevalent in European markets. This approach could help the company
optimize infrastructure costs, improve service delivery, and enhance network
coverage.
“We remain
focused on delivering value to our shareholders and customers,” said Mupita. “This reorganization and partnership with
Mastercard will enable us to accelerate our fintech growth and create new
opportunities for innovation and collaboration.”
By: Nana Appiah Acquaye
