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Mastecard to invest $100m in Airtel Africa’s mobile money business

Africa Global Funds
April 1, 2021, 9:39 p.m.
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Mastercard, a global technology company in the payments industry, has agreed to invest $100m in Airtel Mobile Commerce BV, a wholly owned subsidiary of Airtel Africa.

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Mastercard, a global technology company in the payments industry, has agreed to invest $100m in Airtel Mobile Commerce BV, a wholly owned subsidiary of Airtel Africa.

Airtel Africa is a provider of telecommunications and mobile money services, with a presence in 14 countries across Africa.

AMC BV is currently the holding company for several of Airtel Africa’s mobile money operations and is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.

The transaction values Airtel Africa’s mobile money business at $2.65bn on a cash and debt free basis.

Mastercard will hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the majority stake.

The transaction will close in two stages: $75m will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed, with $25m to be invested at second close upon further transfers.

The transaction is subject to customary closing conditions including necessary regulatory filings and approvals, and the transfer of specified mobile money business assets and contracts into AMC BV.

Alongside the investment, the Group and Mastercard have extended commercial agreements and signed a new commercial framework, which will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.

Following the recent announcement of $200m investment in AMC BV by TPG’s The Rise Fund, and the sale of the Group’s telecommunication towers companies in Madagascar and Malawi, the transaction is a continuation of the Group’s pursuit of strategic asset monetisation and investment opportunities. Airtel Africa aims to continue to monetise its mobile money business with minority investments up to a total of 25% of the issued share capital of AMC BV, and to explore the potential listing of the mobile money business within four years.

The proceeds from the transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Raghunath Mandava, CEO of Airtel Africa, said: “We are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund. This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years. We are significantly strengthening our existing strategic relationship with Mastercard to help us both realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation. The combination of our extensive customer base and distribution platforms and Mastercard’s products and services, innovation and know how, mean we can together accelerate demand and drive growth in financial services for the benefit of all our customers and markets.”

 

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