Mastercard to invest $100 million in Airtel Africa

Airtel Africa, on Thursday, said it has signed an agreement under which Mastercard will invest $100 million in Airtel Mobile Commerce BV (AMC BV), a wholly-owned subsidiary of Airtel Africa plc.

AMC BV is the holding company for several of Airtel Africa’s mobile money operations. It is intended to own and operate mobile money businesses across Airtel Africa’s 14 operating countries.

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The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis. According to sources, Mastercard would get around 3.75 per cent stake in the company.

Mastercard will hold a minority stake in AMC BV upon completion of the transaction. Airtel Africa continuing to hold the majority stake, Bharti Airtel, the parent company of Airtel Africa, said in a statement.

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, it said.

“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,” Raghunath Mandava, Chief Executive Officer, Airtel Africa, said.

The transaction will close in two stages — $75 million will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed, with $25 million to be invested at second close upon further transfers, the company added.

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Airtel Africa on Thursday announced that Mastercard would invest $100 million (about ₹733 crore) in its wholly-owned subsidiary Airtel Mobile Commerce BV (AMC BV).

Mastercard would hold a minority stake in AMC BV on completion of the deal, with Airtel Africa continuing to hold the majority stake, an Airtel statement said.

Sources privy to the development said Mastercard would get about 3.75 per cent stake in the company.

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 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.

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“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,” the 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.

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