MTN Launches Full Takeover of IHS Towers in Landmark R35 Billion Deal

The MTN Group has agreed to acquire the approximately 75% stake in mobile infrastructure company IHS Holding Limited that it does not already own, in a $2.2 billion (approximately R35.2 billion) cash transaction. The deal unites Africa's largest wireless carrier with one of the continent's biggest tower operators and values IHS' entire tower assets at about $6.2 billion (around R99.4 billion), including debt.

Under the terms announced on Tuesday, IHS investors will receive $8.50 per share — a 3% premium to the closing price before news of the talks emerged earlier this month, and a 9.7% premium to the 30-day average. The acquisition marks a strategic pivot for MTN, which had previously pursued a strategy of divesting tower assets. By bringing these critical infrastructure assets back in-house, MTN gains direct ownership of towers it previously leased, positioning it to reduce long-term leasing costs and deepen its role in Africa's telecommunications expansion.

MTN CEO Ralph Mupita framed the transaction as an opportunity to strengthen the group's ability to partner with governments across the continent on infrastructure development. "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," he said.

The deal will be funded using $1.1 billion of IHS's own cash, supplemented by MTN's liquidity and debt. A key condition requires IHS to complete the sale of its Latin American tower and fibre operations before closing, leaving the transaction focused solely on the African tower business, which is valued at approximately $4.8 billion.

French investment firm Wendel, another major IHS shareholder, has agreed to vote in favour of the transaction. Together, MTN and Wendel control 40% of voting shares, though approval requires investors holding two-thirds of the stock to back the deal. The acquisition will also resolve a long-standing governance dispute between MTN and IHS dating back to 2023, involving disagreements over voting rights and board representation.

IHS listed on the New York Stock Exchange in 2021 at $21 per share, but its stock has since declined amid reduced infrastructure spending in key markets and shareholder tensions.

Market Sentiment:

The sentiment is strategically positive but carries execution and valuation considerations. The deal represents a logical consolidation for MTN, transforming a landlord-tenant relationship into direct ownership of mission-critical infrastructure. The long-term benefits — lower leasing costs, greater operational control, and enhanced ability to participate in national digital infrastructure projects — are clear and align with MTN's positioning as a core partner in Africa's connectivity build-out. The resolution of the IHS governance dispute also removes a persistent overhang. However, the 3% premium to pre-announcement prices is modest, reflecting IHS' depressed valuation since its 2021 listing and the condition requiring the disposal of Latin American assets. The funding structure, using IHS's own cash, reduces MTN's immediate capital outlay but also raises questions about the target's balance sheet strength. For IHS shareholders, the offer provides an exit at a reasonable premium to recent trading levels, though well below the IPO price. The market will watch for regulatory approvals and the successful separation of Latin American operations as key milestones. Overall, the deal is a bold strategic move that simplifies MTN's operational model and locks in long-term infrastructure control, though the financial benefits will take time to materialise.

Disclaimer:

This content has been generated using AI technology and is intended for informational purposes only. While efforts have been made to ensure accuracy and relevance, this text should not be considered professional advice or an official statement. Always verify information from authoritative sources before making any decisions. This is not financial advice.