Airtel Africa has signed a deal to sell a minority stake in its mobile money operations to global payment processor, Mastercard Inc for $100 million, valuing the business at $2.65 billion.
Under the agreement, Mastercard will invest $100 million in Airtel Mobile Commerce BV (AMC BV), a wholly owned arm of Airtel Africa plc.
AMC BV is 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.
Earlier this month, Airtel Africa had signed a deal to sell 7.5% stake in its money business to US private equity firm, TPG for $200 million.
Airtel shares up 0.67% at Rs 520.75 in Wednesday early afternoon trade on BSE.
“Mastercard will hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the majority stake,” Airtel Africa Plc said in an official statement.
The transaction, it added, 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.
Transaction proceeds will be used to cut group debt and invest in network and sales infrastructure in the respective operating countries in Africa, the company said.
Airtel Africa added that the transaction is a continuation of the Airtel 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.