MTN to Merge Nigeria Tower Assets in $788 Million Share Exchange

LAGOS (Capital Markets in Africa) – MTN Group Ltd., Africa’s largest mobile-phone operator, said it will merge its shareholdings in Nigerian tower operators into a single asset by switching a stake worth about 10.6 billion rand ($788 million) from one company to another.

The carrier will exchange a 51 percent stake in the owner of INT Towers Ltd. for a larger shareholding in Lagos-based IHS Holding Ltd., the Johannesburg-based company said in a statement on Wednesday. The deal will increase MTN’s stake in IHS to 29 percent, valued at about 22 billion rand.

The deal “simplifies our ownership structure and diversifies our tower investments across the IHS Group,” MTN’s Chairman Phuthuma Nhlekosaid. The transaction will also better enable MTN to crystallize value for shareholders in the future, the company said.

IHS competes with Boston-based American Tower Corp. and Helios Towers Africa LLP to develop telecommunications infrastructure in Africa’s most populous country as demand for wireless access increases. Nigeria is the largest of MTN’s 22 markets across Africa and the Middle East, and the company is seeking to expand in the country even after it was forced to pay a $1 billion fine to regulators last year.

“IHS Group is extremely well positioned for future growth and build-out from 3G upgrades,”’ Nhleko said.

MTN’s 15 percent interest in IHS was held at a fair value of 11.4 billion rand at the end of June, the company said.

MTN shares declined 0.5 percent to 124.84 rand as of 11.10 a.m. in Johannesburg, valuing the company at 235 billion rand ($17 billion).

IHS is Africa’s largest independent phone-tower company and manages more than 23,000 towers across the continent. The business is 26 percent owned by French buyout firm Wendel SA. and counts Goldman Sachs Group Inc. as an investor.