MTN Announces Sale of Minority Stake in $5.2 Billion Fintech Business to Mastercard

Meta Description: MTN, a leading Pan African Telecommunications Group, has recently signed a memorandum of understanding with Mastercard to sell a minority stake in its fintech business valued at $5.2 billion. Read on to learn more about this strategic move and the Group's half-year financial performance.

In an effort to further expand its fintech business, MTN has reached an agreement with Mastercard to sell a minority stake in the business. This move comes as MTN's fintech business demonstrates impressive growth in the first half of the year, with a significant increase in transaction volume. In this blog post, we will delve deeper into the details of this partnership and also discuss MTN's half-year financial performance.

MTN's Fintech Business:

MTN's fintech business has been thriving, with a remarkable 37% increase in transaction volume during the first half of the year. This surge can be attributed to the 61 million active MoMo customers who executed a total of 8.3 billion transactions. Recognizing the immense potential for further growth, MTN has signed a commercial agreement with Mastercard. This collaboration aims to accelerate the expansion of the fintech business, particularly in the areas of payments and remittance services.

Minority Investment by Mastercard:

MTN and Mastercard have also entered into a memorandum of understanding, outlining a minority investment by Mastercard into MTN's fintech business. Based on a total enterprise valuation of approximately $5.2 billion, this investment is expected to enhance the growth and development of the business. The finalization of investment agreements is imminent as due diligence procedures are being completed, and the closing of the investment will be subject to customary conditions.

MTN Group's Half-Year Performance:

Despite a challenging macroeconomic environment, MTN Group has delivered a resilient performance and made significant strategic progress. In South Africa, the Group witnessed improved network availability due to power-resilience investments, resulting in a stronger performance in the second quarter compared to the first. Despite cash shortages and increased inflation in Nigeria, MTN achieved a strong operational result. The policy changes implemented in Nigeria are expected to have short-term negative impacts but are considered constructive for the investment climate in the long run.

Financial Highlights:

MTN Group experienced a 15% growth in service revenue, reaching almost R108 billion in constant-currency terms. This growth can be attributed to a 24% increase in revenue from data services and a 22% increase from fintech services. Revenue from voice services also saw a 6% increase during the period. Additionally, the Group's subscriber base grew by 4% compared to the previous year, benefiting from lower data rates and improved access to broadband services.

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The partnership between MTN and Mastercard marks a significant step in the expansion of MTN's fintech business. With the sale of a minority stake and the support of Mastercard, MTN aims to further accelerate the growth of its fintech services. The Group's half-year financial performance demonstrates resilience and strategic progress, despite challenging market conditions. As MTN continues to navigate the evolving landscape, it remains committed to delivering innovative solutions and enhancing the digital experience for its customers.