MTN Group (MTNJ.J) has agreed to take full control of IHS Holding, buying the roughly 75% stake it does not already own in a deal that values the tower operator at about $6.2 billion, the companies said on Tuesday.
MTN, Africa’s biggest mobile operator, will pay $8.50 per share in cash.
The transaction will be financed through the rollover of MTN’s existing stake of around 24% in IHS, about $1.1 billion in cash from MTN, roughly $1.1 billion from IHS’ balance sheet, and the rollover of no more than existing IHS debt, the tower operator said in a statement reported by Reuters.
With this move, the South Africa-based MTN returns to direct ownership of thousands of towers it originally built and later sold to IHS, effectively reversing a decade-long industry trend toward outsourcing tower infrastructure through leasing arrangements.
Regaining control of these assets is expected to reduce long-term rental expenses for MTN and provide greater flexibility in expanding 5G and fibre networks.
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MTN completes $6.2b acquisition of IHS
The offer price represents a 36% premium to the 52-week volume-weighted average price of IHS’ stock and a 3% premium over its February 4 closing price, when reports first emerged that discussions with MTN were ongoing, the company said.
“This proposed transaction is a pivotal step in further strengthening MTN Group’s strategic and financial position for a future where digital infrastructure will become ever more essential to Africa’s growth and development,” MTN Group President and CEO Ralph Mupita said.
The IHS board has unanimously approved the agreement and will recommend it to shareholders, the company added. In addition to MTN, long-term shareholder Wendel (MWDP.PA) has also agreed to vote in favour of the deal.
Upon completion, Wendel will receive approximately $535 million for its 19% stake in IHS, the European investment firm said in a separate statement.
Earlier on Tuesday, IHS agreed to sell its Latin American tower operations in Brazil and Colombia to Macquarie Asset Management. Following the transaction, MTN will own nearly 29,000 IHS towers in Africa.
Once the deal is finalised, IHS will be taken private and become a wholly owned subsidiary of MTN, the mobile operator said in a separate statement.
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Image Credit: Reuters
