MTN has approximately 24.7% shareholding in IHS.
MTN Group has moved a step closer to taking full ownership of telecommunications tower operator IHS Towers, after shareholders of the infrastructure company approved the proposed acquisition at an extraordinary general meeting (EGM).
The JSE-listed telecommunications group today announced that IHS shareholders voted in favour of the transaction by the required two-thirds majority at the EGM held on 4 August, satisfying one of the key conditions precedent to the deal.
MTN first announced in February that it had entered into an agreement to acquire the remaining shares in IHS, a move that would give the mobile operator full ownership of one of Africa’s largest independent tower companies.
The acquisition forms part of MTN’s Ambition 2030 strategy, which aims to strengthen the group’s digital infrastructure capabilities and diversify revenue streams as demand for connectivity, cloud services and artificial intelligence (AI) continues to grow across the continent.
“The approval by IHS shareholders is an important step toward completion of the transaction,” says Ralph Mupita, MTN Group president and CEO.
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“Within our Ambition 2030, the three-platform strategy, towers are a critical value-creation driver that will strengthen MTN’s strategic and financial position for the future, in a world where digital infrastructure and AI are becoming increasingly essential to Africa’s growth and development.”
Tower infrastructure has become increasingly strategic for mobile network operators as demand for high-speed mobile broadband, cloud computing and AI-powered services drives the need for expanded and more efficient network capacity.
The proposed acquisition is expected to strengthen MTN’s position as it continues expanding its digital ecosystem across Africa, where it serves more than 300 million subscribers.
IHS is one of the world’s largest tower companies, with nearly 29 000 towers in Africa serving various mobile network operators in five key MTN markets.
According to the mobile operator, the proposed transaction, which follows discussions noted in February, marks an important step to unlock compelling value for MTN, and strengthen and reintegrate its ownership of critical digital infrastructure across Africa.
For IHS shareholders, MTN notes, it provides an attractive opportunity to crystalise value.
The funding for the proposed transaction of the remaining shares MTN does not already own, for a consideration of $2.2 billion (R35 billion), will be through cash of approximately $1.1 billion on IHS’s balance sheet, along with available liquidity and debt from MTN.
MTN has approximately 24.7% shareholding in IHS, and as part of the transaction, it intends to take the company private through the acquisition of all outstanding shares it does not own, pursuant to a cash merger.
By reintegrating the tower assets, MTN says it will be able to internalise the margin currently paid to IHS, benefit from current and future incremental third-party revenues, improve cost predictability and unlock significant long-term value embedded in its existing investment.
The transaction remains subject to the receipt of the necessary regulatory approvals, which MTN says are still in progress. No timeline has been provided for the completion of the acquisition.
