MTN Group will spin off its fintech operations in Nigeria, Ghana, and Uganda by mid-2025 to facilitate Mastercard’s minority stake acquisition. The processes are more advanced in Uganda and Ghana, while Nigeria faces regulatory complexities. The fintech unit is valued at $5.2 billion, with Mastercard expected to invest up to $200 million. MTN also plans to boost dividends despite recent losses.
MTN Group plans to spin off its financial technology (fintech) operations in Nigeria, Ghana, and Uganda by mid-2025. This strategic move aims to facilitate Mastercard Inc.’s acquisition of a minority stake in these rapidly growing units. The announcement was made by CEO Ralph Mupita during an interview with Bloomberg.
The spin-off is necessary to finalize a deal with Mastercard established in 2023. In Uganda and Ghana, the separation processes are more advanced, whereas Nigeria faces additional regulatory challenges. Mupita noted that Nigeria presents “a bit more complexity with some more regulatory processes to work through,” but MTN remains committed to completing the transition in all three markets.
Alongside its fintech initiatives, MTN is also pursuing network-sharing agreements to optimize infrastructure costs and enhance service delivery, mirroring strategies already implemented in Europe. The deal with Mastercard values MTN’s fintech unit at $5.2 billion, with Mastercard potentially taking a stake worth up to $200 million.
MTN highlighted its collaboration with Mastercard, stating, “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.” The companies also signed a memorandum of understanding to solidify this investment.
In its recent financial results for 2024, MTN reported a loss of 9.59 billion rand, which exceeded previous estimates of a 3.87 billion rand loss. The company declared a dividend of 3.45 rand per share for this period and aims to increase its payout to a minimum of 3.70 rand per share for the current financial year, reflecting confidence in future growth.
MTN Group is set to spin off its fintech units in Nigeria, Ghana, and Uganda to enable Mastercard’s minority stake acquisition. While some markets have progressed faster than others, regulatory challenges in Nigeria are being addressed. The strategic partnership with Mastercard, valued at $5.2 billion, underscores MTN’s ambition in the fintech landscape despite recent financial losses and a commitment to enhancing shareholder returns.
Original Source: nairametrics.com
