Nigeria to evaluation MTN’s $2.2 billion IHS Towers deal

Nigeria’s Ministry of Communications, Innovation, and Digital Economic system will evaluation MTN Group’s proposed $2.2 billion acquisition of IHS Towers, a landmark deal that may hand Africa’s largest cellular operator full management of one of many continent’s most intensive tower portfolios.

In a press release issued on Tuesday, Minister Bosun Tijani mentioned the Ministry would undertake a “thorough evaluation” of the transaction in collaboration with related regulators, citing the strategic significance of telecoms infrastructure to nationwide safety, monetary companies, and financial progress.

“Our goal is evident: to make sure that any market consolidation or structural modifications shield shoppers, safeguard investments, and protect the long-term sustainability of the sector,” he mentioned. 

The ministry’s intervention underscores how delicate infrastructure consolidation has turn into in Nigeria’s fragile however recovering telecoms market. After years of forex volatility, rising tower lease prices, and debt pressures that strained operators and tower firms alike, regulators are actually balancing investor confidence with competitors, shopper safety, and nationwide curiosity.

Earlier on Tuesday, MTN confirmed it had agreed to accumulate all excellent shares in IHS that it doesn’t already personal at $8.50 per share, valuing the corporate at roughly $6.2 billion. MTN at the moment owns about 24.7% of IHS and intends to extend its stake to 100% by means of a money merger that may take the tower firm non-public.

The transaction would consolidate management of almost 29,000 telecom towers throughout Africa, tightening MTN’s grip on the bodily infrastructure that underpins its community operations in Nigeria, its largest market.

MTN mentioned it plans to fund the $2.2 billion acquisition utilizing roughly $1.1 billion in money on IHS’s stability sheet, alongside obtainable liquidity and new debt on the group degree.

The deal marks some of the consequential infrastructure shifts in Nigeria’s telecoms sector in over a decade. For years, operators spun off tower belongings to companies like IHS to scale back capital expenditure and deal with buyer progress. Reversing that mannequin indicators a strategic rethink as profitability pressures reshape the business.

IHS Towers supplies companies for different telecom operators, together with Airtel, the second-largest cellular community operator in Nigeria. A profitable acquisition wouldn’t solely hand over the tower firm’s belongings, however it could additionally give MTN a bonus over its opponents within the Nigerian market.

MTN already takes 52% share of the market in Nigeria, with Airtel trailing at 33.94% share of the market. MTN has additionally entered into infrastructure-sharing offers that permit opponents like Airtel and T2 Cell trip on its infrastructure in areas the place they’re unable to succeed in prospects.

Over the previous two years, Nigeria’s telecom operators have confronted mounting monetary stress from naira devaluation and dollar-denominated tower lease obligations. MTN Nigeria and Airtel Africa each reported steep international change losses in 2023 earlier than returning to improved profitability in current outcomes, aided by tariff changes and price restructuring.

For IHS, Nigeria stays its largest market, however one weighed down by forex headwinds and excessive energy prices. Any acquisition would due to this fact symbolize not only a company buyout, however a structural shift in how telecom infrastructure is financed, owned, and managed in Africa’s largest telecoms financial system.