MTN seeks Nigerian buyers for 30% IHS stake worth up to $1.1 billion

MTN Group is seeking local investors to acquire a 30% stake in IHS Nigeria as part of conditions attached to its acquisition of IHS Holding Limited, with the proposed stake sale expected to raise between $900 million and $1.1 billion.

Bloomberg reported the development, citing people familiar with the matter who asked not to be identified because the details are private.

The development comes just three days after Nairametrics reported that MTN Group had secured conditional approval from Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) for its proposed acquisition of IHS Holding.

The approval is conditional on MTN selling down up to 30% of the Nigerian component of the IHS business to local investors at market prices over time.

What they are saying

Citing people familiar with the matter, Bloomberg reports that the proposed sale of the 30% stake could generate between $900 million and $1.1 billion for MTN.

MTN Group Chief Executive Officer, Ralph Mupita, confirmed that proceeds from the sell-down would be used to reduce debt linked to the IHS transaction, while declining to provide details on the potential value of the stake.

• “Proceeds from any sell-down would be used to pay down IHS-related debt,” Mupita said in an interview when asked about the deal. “The deal would be done on market-oriented valuation basis.”

IHS operates about 29,000 telecom towers across Africa, with Nigeria and South Africa representing its largest markets. In Nigeria, the tower company operates about 18,000 mobile-phone towers, according to people cited by Bloomberg.

Get up to speed

In February this year, MTN Group, Africa’s largest mobile network operator, entered advanced discussions to acquire the roughly 75% stake in IHS Holding Limited that it did not already own.

• By early August, Nairametrics reported that shareholders of IHS Holding Limited had approved MTN Group’s proposed acquisition of the remaining shares in the tower infrastructure company, clearing a major milestone for the transaction.
• Just three days ago, Nairametrics reported that MTN Group had secured conditional approval from Nigeria’s FCCPC for its proposed $6.2 billion acquisition of IHS Holding Limited.

The approval, however, came with a requirement for MTN to sell down up to 30% of its Nigerian IHS business to local investors over time and at market prices.

What you should know

MTN and IHS have maintained a longstanding relationship in the telecom infrastructure market, with MTN selling thousands of its telecom towers to IHS through sale-and-leaseback arrangements over the years.

A landmark transaction took place in South Africa in 2022, when MTN agreed to sell more than 5,700 sites to IHS Towers as part of the companies’ broader infrastructure partnership.

• IHS has since become one of the largest independent telecom tower operators in Africa. It holds an estimated 41% share of the evaluated tower market, controlling approximately 16,500 of nearly 40,000 towers.
• While MTN continues to consolidate its position in Africa’s telecom infrastructure market, the group is also advancing its fintech ambitions.

On August 25, Nairametrics reported that MTN Group is exploring banking licences in select markets as it considers expanding its lending business using its own balance sheet.