Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa announced the signing of an agreement Mastercard will invest $100m in Airtel Mobile Commerce BV .
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 and 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 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.
“With today’s announcement, we are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund which we announced two weeks ago. 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,” said Raghunath Mandava, the CEO of Airtel Africa.
“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.”
Alongside the investment, Airtel Africa 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.
“As previously announced, 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,”Airtel Africa said in a statement.