Airtel Africa has signed a deal to sell about 3.75 per cent stake in its wholly-owned subsidiary Airtel Mobile Commerce to Mastercard for $100 million (about Rs 733 crore).
In a statement, issued on Thursday, the telco said Mastercard would hold a minority stake in AMC BV on completion of the deal, with Airtel Africa continuing to hold the majority stake.
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.
“Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 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 Commerce BV…,” Airtel statement said.
The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis.
The transaction is subject to regulatory nod, and the transfer of specified mobile money business assets and contracts into AMC BV.
“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, among others,” Airtel statement said.
The proceeds from the transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.
In a similar deal, Airtel Africa had sold 7.5 per cent stake to US private equity firm, TPG for $200 million earlier this month.
Post the announcement, shares of Airtel were closed higher at Rs 520.90, up by 0.70 per cent on the BSE. Earlier in the day, it had touched the high of Rs 523.90.