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Mastercard acquires minority stake in MTN

American Mastercard takes a minority stake in South African MTN, a payments and remittances fintech.


MTN Press Release

Mastercard acquired a minority investment into South African, MTN in a deal based on the fintech’s enterprise valuation of $5.2bn. The details of the investment, signed on a cash and debt-free basis, were not disclosed. 

“Signing of the definitive investment agreements is expected to occur in the very near term as we approach finalisation of customary due diligence,” MTN said on Monday, in an announcement on its six-month earning period. 

The deal comes on the heels of a 2021 Mastercard invested $100m into Airtel Africa, a mobile money app that also works in the remittances space. Earlier this month, Mastercard and Airtel also launched a remittances transfer service for a reported 100m users.  

According to the company, the fintech was looking to “identify and potentially introduce strategic minority investors into MTN Group Fintech” and in working with Mastercard executed previous commercial agreements that supported the fintech business’s payments and remittance services to date. 

MTN’s volume of transactions increased by 37 per cent in the first hald of 2023, up to R8.3bn. The company said that its balance sheet “remained strong, with all key metrics well within the limits of our loan covenants,” as they embarked on expansion plans. 

The fintech also said that it had progressed plans to exit Afghanistan, a country on the brink of economic collapse, according to the UN. MTN would no longer facilitate remittances, rather selling the division to  Investcom AF, an affiliate company of M1, a Lebanese holding company, and Shwe Byain Phyu (SBP) Group, a Myanmar company that bought Norwegian Telenor’s operations in the country after the military coup. 

“In the first half of 2023, MTN Group delivered resilient results, advanced our strategy by partnering with Mastercard on the MTN fintech business…” MTN said on Monday, “this was achieved in a difficult operating environment marked by elevated inflation, weaker local currencies and regulatory developments across our 19 markets.”

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