Global payments technology company Mastercard has invested 200 million U.S. dollars to acquire minority stakes in MTN Group Fintech, the financial technology arm of the MTN Group, a release has said.
The South African-based telecommunication group said on Tuesday that Mastercard would acquire a total of 3.8 percent stakes in the FinTech business.
By the end of the transaction, MTN Group Fintech will be worth 5.2 billion dollars (R99 billion) on a cash and debt-free basis, excluding any cash reserves or outstanding debt.
“These agreements complement the larger commercial relationship between the group and Mastercard to support the continued development and growth of technology and infrastructure to drive financial inclusion across the African continent,” said MTN in a statement.
The mobile operator explained that its new definitive agreement with Mastercard is consistent with both companies’ ultimate business goal of promoting financial inclusion across the continent through ongoing technological and infrastructure development and growth.
The telecom operator stated that the deal with Mastercard is non-categorised according to the Johannesburg Stock Exchange (JSE) listing requirements and is subject to customary closing conditions.
The Mastercard deal comes when MTN Group wants to expand its fintech business. The telco intends to separate its financial services division while expanding the scope of its telecoms business.
On August 14, 2023, MTN Group’s President and CEO, Ralph Mupita, revealed the company’s intention to sell a 30 percent stake in the fintech firm.