Mastercard has sealed a pact with wireless operator Airtel Africa that will see it procure a minority interest in the telco’s mobile money division, Airtel Mobile Commerce BV (AMC BV).
An estimate reached for the deal purpose, using cash and debt-free valuation parameter, puts the mobile money business alone at $2.65 billion in the African market, where Airtel itself has footprints in 14 countries.
Mastercard will take a stake equivalent to $100million of that sum once the transaction is over, Airtel said in a note to the Nigerian Stock Exchange on Thursday.
It is the second of such deal to be announced in less than two weeks, considering that a private equity firm, The Rise Fund, acquired shares worth $200 million in AMC BV in March.
“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 statement said.
Shares in Airtel Africa has returned 9.18 per cent in Nigeria so far this year and was trading at N930 per unit at 11:35 WAT in Lagos on Friday.
Airtel, headquartered in New Delhi, hopes to list its mobile money subsidiary as an independent entity in four years, and is stepping up plans to raise minority investments in the company to one-fourth of its issued share capital.
The idea is to raise cash sufficient for the dual purpose of network and sales expansion, and offsetting the group’s debt.
AMC BV services span merchant and commercial payments, international money transfers, mobile wallet deposit and withdrawals, virtual credit card as well as loans and savings.