Pan-African operator Airtel Africa has announced a major agreement with payments company Mastercard, through which Mastercard plans to invest $100 million in Airtel Mobile Commerce (AMC), a subsidiary of Airtel Africa and the holding company for several of Airtel Africa’s mobile money operations.
AMC is intended eventually to own and operate the mobile money businesses across all of Airtel Africa’s 14 operating countries. The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis.
Mastercard will hold a minority stake in AMC once the deal is completed. More importantly perhaps, both partners 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.
This agreement, along with other deals – including the recent sale of the Airtel Group’s telecommunication towers companies in Madagascar and Malawi – is part of Airtel Africa’s ongoing pursuit of strategic asset monetisation and investment opportunities. The company aims to continue to monetise its mobile money business and hopes to explore the potential listing of the mobile money business within four years.
Airtel says that the proceeds from the transaction with Mastercard will be used to reduce group debt and invest in network and sales infrastructure in its various operating countries.
As this deal makes clear, Airtel Africa’s mobile money services are not just a leading digital mobile financial services platform across Africa – they’re also highly attractive to investors and partners.
In March we reported that the Rise Fund, the global impact investing platform of alternative investment firm TPG, planned to invest $200 million in AMC.
However, in the past year alone, says Airtel Africa, in addition to Mastercard and Rise, the company has announced partnerships with Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit.