By Ayomide Ottoju
MTN Nigeria Communications Plc has announced plans to divest its ownership in Y’ello Digital Financial Services and sell a 60 per cent stake in MoMo Payment Service Bank to MTN Group in a transaction valued at N152.06 billion.
The proposed deal, disclosed in a shareholders’ FAQ ahead of the company’s Annual General Meeting scheduled for April 30, 2026, targets the fintech subsidiaries that currently drive MTN Nigeria’s digital financial services revenue.
MTN Nigeria said the transaction, subject to shareholder and regulatory approvals, is expected to be completed on or before December 31, 2026. It will be executed through a combination of fresh capital injection into the fintech businesses and a secondary acquisition of shares from MTN Nigeria.
Under the arrangement, MTN Group—acting through MTN Group Fintech B.V.—will acquire majority ownership of the two subsidiaries, while MTN Nigeria will retain a 40 per cent stake. Both parties will subsequently transfer their interests into a new holding company to be registered with the Central Bank of Nigeria, resulting in a shared ownership structure of 60 per cent for MTN Group Fintech and 40 per cent for MTN Nigeria.
The company stated that an independent fairness opinion issued by KPMG valued the transaction at N95.5 billion, describing it as fair and reasonable. MTN Nigeria added that the valuation represents a 2.1x premium to the fintech subsidiaries’ carrying value as of December 2025.
According to the company, it has fully funded the fintech units to date, but their continued expansion requires significant capital. The transaction is expected to enable MTN Group to provide additional funding to accelerate growth and tap opportunities in Nigeria’s digital financial services market.
MTN Nigeria noted that the restructuring aligns with MTN Group’s Ambition 2030 strategy to become Africa’s leading connectivity, fintech, and digital infrastructure platform. It added that the move would allow the company to prioritise capital allocation toward strengthening its balance sheet, maintaining network leadership, enhancing service quality, and driving growth in its core connectivity business.
The company further assured shareholders that their holdings in MTN Nigeria will remain unchanged if the deal is approved. However, investors will retain indirect exposure to the fintech business through MTN Nigeria’s 40 per cent stake.
MTN Nigeria also disclosed that the fintech subsidiaries are currently loss-making, and their separation from its financial results is expected to improve overall performance. Reduced funding obligations to the units, it added, could boost free cash flow and support stable or improved dividend payouts over the next three to five years.
