Mastercard to Acquire Partial Ownership of MTN's $5.2 Billion Fintech Venture

Mastercard has reached an agreement to acquire a minority share in the fintech arm of MTN Group, Africa's leading mobile provider, with a valuation of $5.2 billion.

The formalization of investment agreements is imminent as both parties conclude standard due diligence procedures. The investment will be subject to customary closing conditions, as stated in MTN's half-year financial performance report released on Monday.

Ralph Mupita, President, and CEO of MTN Group, revealed that the deal would involve a commercial collaboration centered on payments and remittances, leveraging Mastercard's technological infrastructure to facilitate growth across Africa. Additionally, Mastercard will invest in a minority stake. The specific share size will be disclosed upon the completion of the transaction, according to Bloomberg.

Mupita commented on the company's performance, highlighting resilience and strategic advancements amid challenging macroeconomic conditions. He pointed to positive developments, such as improved network availability in South Africa and robust operational results in Nigeria, despite short-term challenges resulting from policy changes.

This development follows MTN Group's announcement last year of its search for minority investors for its African fintech subsidiary. The subsidiary was separated from the telecom business to accelerate growth in the flourishing fintech sector. MTN's prospects received a boost when it secured a mobile banking license in Nigeria, enabling the provision of financial services to millions of new customers in its largest market.

In the first half of the current year, MTN's mobile money business witnessed a 37% rise in recorded transactions, totaling $8.3 billion, with over 60 million active users. As of June 2023, the MTN Group's subscriber base exceeded 290 million.