Qatar holding to acquire minority stake in Airtel Africa’s mobile money business

The Qatar Investment Authority (QIA), through its affiliate, Qatar Holding LLC, has signed an agreement to invest $200 million in Airtel Africa’s mobile money business.

The investment will see QIA holding a minority stake in Airtel Africa’s mobile money services.

Simon O’Hara, group company secretary for Airtel Africa, announced in a statement on Friday.

Operating under the Airtel Money brand, Airtel Africa’s mobile money services is a digital mobile financial services platform that includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual card and international money transfers.

According to the agreement, QIA will invest the agreed sum through a secondary purchase of shares in Airtel Mobile Commerce BV (AMC BV), a subsidiary of Airtel Africa plc.

AMC BV is the holding company for several of Airtel Africa’s mobile money operations.

The holding company is intended to own and operate the mobile money businesses across all of Airtel Africa’s 14 operating countries.

The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis.

According to the agreement, the transaction, which will close in two stages, is subject to customary closing conditions.

QIA will hold a minority stake in AMC BV upon completion of the transaction, alongside other minority investors, while Airtel Africa continues to hold the majority stake.

A sum of $150 million will be invested at the first close in August, while $50 million will be invested at the second close once further transfers of certain mobile money operations and contracts into the AMC BV perimeter have been completed.

This development comes following the announcement of a $200 million investment in AMC BV by The Rise Fund in March and a $100 million investment by MasterCard in April.

In his remarks, Raghunath Mandava, chief executive officer of Airtel Africa, said the investment would help the company bank the unbanked across Africa.

“With today’s announcement we are pleased to welcome QIA as a prospective investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as a further partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa,” he said.

Reacting to the development, Mansoor bin Ebrahim Al-Mahmoud, CEO of QIA, said, “We are delighted to build on our support of Airtel Africa in promoting financial inclusion to the large and growing population of Sub-Saharan Africa. Airtel Money plays a critical role in facilitating economic activity, including for customers without access to traditional financial services. We firmly believe in its mission to expand these efforts over the coming years.”