MTN Group is moving closer to becoming a major landlord of digital infrastructure on the continent after IHS Towers investors approved by a two-thirds majority a resolution that will see the telco increase its shareholding to 100% in the company.
The approval by IHS shareholders fulfils one of the conditions precedent to the transaction, said Africa’s largest telecom services provider, MTN Group, in a notice to shareholders through the Johannesburg Stock Exchange.
Holders of 264 066 813 IHS ordinary shares voted in favour of the transaction at a recent extraordinary general meeting.
MTN first announced its intention to acquire full control of IHS Towers in February after the board of the towers company accepted an offer of $8,50 a share.
The transaction remains subject to various regulatory approvals and the delisting of IHS from the New York Stock Exchange.
The latest development is one step in a series of approvals required to complete the deal.
If successful, the deal will see MTN Group strengthen its position as a major digital infrastructure landlord, as IHS operates nearly 29 000 towers in Africa serving various mobile network operators.
The proposed transaction comes as Africa shifts from being a consumer of digital infrastructure to a builder, owner, and operator of the networks powering its digital economy.
"The approval by IHS shareholders is an important step toward completion of the transaction," said Ralph Mupita, MTN Group President and CEO. "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."
Funding for the proposed acquisition of the remaining shares MTN does not already own—a consideration of approximately $2,2 billion—will be drawn from $1,1 billion cash on IHS’s balance sheet, along with available liquidity and debt from MTN.
MTN currently holds an approximate 24,7% shareholding in IHS.
As part of the transaction, the group 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 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, said MTN Group.
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