• African telco is buying the 75% stake in towerco it doesn’t already own for $2.2bn, giving it full control over 29,000 towers
• MTN will acquire the African assets of IHS once the tower company completes the divestment of its Latin American operations
• The MTN deal values IHS at $6.2bn including debt

Pan-African operator MTN Group, which has operations in 19 markets across Africa and the Middle East, has reached an agreement to buy the 75% stake in IHS Towers that it does not already own in a deal that values the infrastructure firm at around $6.2bn (including debt).

News of the deal comes two weeks after MTN first confirmed it was in talks to buy IHS. 

The deal is more complex than it first seems, as IHS has already agreed two deals to offload its assets in Latin America – Macquarie Asset Management is acquiring IHS Latam (8,860 sites) in a deal valued at $952m, while TIM SA is acquiring IHS’s 51% stake in I-Systems, a shared fibre infrastructure operator in Brazil, in a deal that values I-Systems at $452.6m. 

Once those deals are completed, MTN will, subject to shareholder and regulatory approval, pay $2.2bn to take full control of IHS’s remaining assets – namely, its 29,000 towers in five key African markets (Cameroon, Côte d'Ivoire, Nigeria, South Africa and Zambia).  

The deal will partially be funded through cash of approximately $1.1bn on IHS's balance sheet, along with available liquidity and debt from MTN, the telco explained. It already owns a 24.7% stake in IHS, but the agreement will give it 100% ownership and effectively take the infrastructure firm private, MTN noted. According to IHS, the deal with MTN values IHS Towers at an enterprise value of $6.2bn.  

“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,” stated MTN Group President and CEO Ralph Mupita. “This transaction gives us a unique opportunity to buy back our towers and strengthen our ability to be partners for progress to the nation states in which we operate.”

Long-term IHS investor Wendel has already indicated its intention to support the deal, meaning MTN believes it already has around 40% of the votes necessary from the IHS board to conclude the deal.

Once all the deals are completed, IHS Towers will no longer be publicly listed on the New York Stock Exchange and it will become a wholly owned subsidiary of MTN. 

IHS Chairman and CEO Sam Dawish added: “The proposed transaction deepens our long-standing partnership with MTN as it combines Africa’s largest mobile network operator with one of its largest digital infrastructure platforms and underscores the strong connection between IHS Towers and the African continent.”

The acquisition will face regulatory scrutiny, with the Nigerian government already confirming it plans to undertake a “comprehensive review”, citing the strategic importance of telecom infrastructure to Nigeria’s national security.

- James Pearce, Editor, TelecomTV