Mastercard has announced that it will invest the sum of $100 million in Airtel Africa’s mobile money operations. With this investment, Mastercard will hold a minority stake in Airtel Mobile e-commerce and this is in line with Airtel Africa’s strategic plans of monetising the mobile money business by selling up to a 25 percent stake in the unit, as announced by the company.
As revealed in a statement by the company, “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in fourteen countries across Africa, announces the signing of an agreement under which Mastercard, a leading innovator and global technology company in the payments industry, will invest $100 million in Airtel Mobile Money Commerce BV”
After the papers have been signed and the deal has been concluded, Mastercard will own a minority stake of 3.75 percent in Airtel Mobile Commerce (AMC) BV and Airtel Africa will continue to be the majority stake holder.
According to Airtel Africa, this transaction brings the company’s mobile money business at $2.65 billion on a cash and debt free assumption. Airtel Mobile Commerce BV is the holding company of Airtel Africa’s numerous mobile money operations, and intends to own and operate the mobile money businesses across the whole of Airtel Africa’s fourteen operating countries. According to Airtel Mobile Commerce (AMC) BV, “alongside the investment, the Group and Mastercard have extended commercial agreements and signed a new commercial framework which will deepen their partnership across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others”
The company revealed that the proceeds from the transaction will be geared towards reducing Group debt and investing in network and sales infrastructure in the respective operating countries. The company also specified that the transaction is subject to customary closing conditions, and will include necessary regulatory filings and approvals, and the transfer of specified mobile money business assets and contracts into AMC BV.
In a similar deal, Airtel Africa sold 7.5 percent stake to US private equity firm, TPG for $200 million earlier this month.