MTN Signs Deal to Sell Fintech Unit to Mastercard
Ralph Mupita, CEO

MTN Signs Deal to Sell Fintech Unit to Mastercard

MTN Group has signed a memorandum of understanding with Mastercard for a minority stake in the Group Fintech based on an enterprise valuation of $5.2 billion, a development associated with tough economic conditions, and rising competition across its major markets.

In its recently published financial scorecard, the telco company’s earnings slipped. The South Africa-based telecommunications group said Monday it generated a pretax profit of 18.31 billion South African Rand ($966.2 million) compared with ZAR18.58 billion a year earlier.

The telecom operator reported a profit after tax attributable to equity holders for the six months ended June 30 was 9.24 billion rands, compared with 8.04 billion rands a year ago.

Its financial scorecard showed that earnings per share (EPS) was 5.01 rands, 15.70% higher year on year when compared with 4.33 rands the group delivered in the comparable period in 2022.

MTN said with its first-half results that the signing of definitive terms is expected in the very near term after due diligence. The deal, which is subject to customary closing conditions, is part of MTN’s Ambition 2025 growth strategy.

The network operator’s revenue was 113.20 billion rands, compared with 97.49 billion rands previously. Revenue rose to ZAR113.20 billion from ZAR97.49 billion. Within this, data revenue grew 16.5% while fintech revenue grew 21.4% on a constant currency basis.

MTN said the business is managing challenges in its operating environment and the near term hits to its top line and margins, and backed its medium-term guidance. It has previously guided for at least mid-teens group service revenue growth in the medium term.

The telecom group with a deep footprint across African markets disclosed that signing of definitive investment agreements is expected in the near term. #MTN Signs Deal to Sell Fintech Unit to Mastercard Dollar Index Decreases by 1.6% in July