MTN Group is seeking Nigerian investors to acquire a 30% stake in IHS Nigeria as part of conditions attached to regulatory approval for its proposed acquisition of IHS Towers, opening the door for greater local ownership of one of the country’s biggest telecom infrastructure businesses.
The proposed sell-down could be valued at between $900 million and $1.1 billion, according to reports citing people familiar with the matter. The transaction would form part of MTN’s compliance with conditions set by Nigerian regulators before the wider acquisition can be completed.
MTN announced in February that it planned to acquire the remaining shares in IHS Towers that it does not already own, in a transaction that would value the tower company at about $6.2 billion and take MTN’s ownership to 100%.
IHS Nigeria is one of the most important assets in the wider IHS Towers business and operates thousands of mobile telecommunications towers across the country. The infrastructure supports mobile connectivity by providing the sites and equipment that telecom operators use to run their networks.
Nigerian regulators have, however, attached conditions to the proposed acquisition. MTN is required to reduce its interest in the Nigerian component of the business by up to 30% over time, with the stake to be sold to local investors on market-based terms.
The condition means MTN would not retain full ownership of IHS Nigeria even after completing the wider acquisition of IHS Towers.
The planned sell-down is also significant because it could give Nigerian investors a larger stake in infrastructure that underpins the country’s digital economy. Telecom towers are essential to mobile voice and data services, which have become increasingly important to businesses, financial services and other digital platforms.
For MTN, the move could also help reduce debt associated with the IHS transaction. The group’s chief executive, Ralph Mupita, has said proceeds from the proposed sell-down would be used to pay down IHS-related debt, while maintaining that any transaction would be completed on a market-oriented valuation basis.
The search for local investors now shifts attention to who could participate in the transaction and how the stake would eventually be structured. The outcome could determine the extent to which Nigerian capital participates in ownership of a critical part of the country’s telecommunications infrastructure.
The proposed IHS acquisition is still subject to the completion of remaining conditions, but the local ownership requirement has become a central part of MTN’s path towards completing the deal.
