Mastercard Signs MoU to Acquire Minority Stake in MTN’s $5.2 Billion Fintech Arm

MTN Group had on Monday disclosed it had signed a Memorandum of Understanding (MoU), an initial agreement with global payments giant, Mastercard for a minority investment in its fintech arm, valuing it at around US $5.2 billion dollars, almost 40% of MTN’s total market value.

Several reports has it that MTN had been trying to unlock value in its financial technology and payments arm.

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The deal will be structured in two parts, including a commercial agreement on payments and remittance that uses Mastercard’s technology infrastructure to expand in Africa and the investment into a minority stake, MTN Chief Executive Officer Ralph Mupita said on a video call on Monday. The size of the stake will be disclosed when the deal closes, he said.

Signing of the definitive investment agreements is expected to occur in the very near term.

“Following the bespoke process to identify and potentially introduce strategic minority investors into the MTN Group fintech business, we are pleased to announce that we have executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.

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“MTN and Mastercard have further signed a memorandum of understanding, which provides for a minority investment by Mastercard into group fintech based on a total enterprise valuation of about US$5.2-billion (R99-billion) for the business on a cash- and debt-free basis,” it said.

“Signing of the definitive investment agreements is expected to occur in the very near term as we approach finalisation of customary due diligence. The closing of the investment will be subject to customary closing conditions.”