Telecommunications giant Airtel Africa has penned an agreement to sell its minority stake to popular payments platform MasterCard to the tune of $100 million.
Under this arrangement, MasterCard will invest $100m in Airtel Mobile Commerce BV (AMC BV), a wholly owned subsidiary of Airtel Africa plc. 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 14 operating countries.
Currently, 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,” Airtel Africa plc said in a statement.
The statement added: “Alongside the investment, the group 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.”
The deal is another transaction in recent moves by the company to consolidate its footprint in the African continent through strategic partnerships.
In March this year, TPG’s The Rise Fund invested $200m in AMC BV to kick-start a month of activity that also resulted in the sale of the group’s telecommunication towers companies in Madagascar and Malawi.
Raghunath Mandava, the CEO of Airtel Africa, welcomed MasterCard as the most recent investor in the company’s mobile money business, joining The Rise Fund as the latest in their strategic partnerships to grow the brand’s business.
“This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the intention to list this business within four years,” Mandava said.
“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,” he concluded.