MTN Group Ltd. will spin off its fintech operations in Nigeria, Ghana, and Uganda to enable Mastercard Inc. to acquire a minority stake. The fintech unit’s valuation is pegged at $5.2 billion, with an incoming investment of up to $200 million. The organization seeks to address regulatory challenges in Nigeria while enhancing shareholder dividends.
MTN Group Ltd. is set to spin off its financial technology operations in Nigeria, Ghana, and Uganda within the first half of the year. This reorganization will facilitate Mastercard Inc.’s acquisition of a minority stake in these rapidly growing fintech units, as outlined by Chief Executive Officer Ralph Mupita in a recent Bloomberg interview. This initiative is part of a deal initiated in 2023 between MTN and Mastercard.
The fintech sector in Africa is enjoying significant growth, especially among the tech-savvy youth who increasingly utilize mobile phones for banking services. MTN reported a remarkable 35% increase in mobile-money transactions, reaching over $320 billion.
Mastercard is expected to acquire a stake valued up to $200 million, which will be revealed once the deal is finalized, placing the overall valuation of MTN’s fintech unit at $5.2 billion. The separation process is progressing well in Uganda and Ghana; however, Nigeria presents challenges due to more complex regulatory requirements, according to Mupita.
Additionally, MTN remains open to exploring network sharing arrangements, reflecting a trend seen in European telecommunications markets. The company declared a dividend of 3.45 rand (0.19 cents) per share for 2024, surpassing the consensus estimate of analysts. Furthermore, the company aims to increase dividends to at least 3.70 rand per share in the current financial year, as stated in their announcement.
In summary, MTN Group Ltd. is strategically reorganizing its fintech operations in Nigeria, Ghana, and Uganda to facilitate Mastercard’s investment. This move highlights the rapid growth in Africa’s fintech sector and reflects MTN’s commitment to enhancing shareholder value through increased dividends. As the company navigates regulatory complexities in Nigeria, it simultaneously explores network sharing opportunities in line with global trends.
Original Source: businessday.ng
