MTN Nigeria has acquired a 7.17% minority stake in MoMo Payment Service Bank (MoMo PSB) from Acxani Capital for ₦6.95 billion ($4.36 million) in order to consolidate its fintech operations. This acquisition now makes MoMo PSB a wholly-owned subsidiary of MTN Nigeria.
Prior to this transaction, MTN Nigeria held an 80% stake in MoMo PSB, with Acxani Capital owning the remaining 20%. In May 2024, Acxani Capital proposed to dispose of its 20% stake, ultimately reducing it to 7.17%. Both parties agreed on a purchase price of ₦6.95 billion for this minority stake.
The financial implications of this deal include a decrease of ₦12.97 billion in MTN’s “Other Reserves.” The total expenditure of ₦16.35 billion on this acquisition includes the ₦6.95 billion paid to Acxani Capital and an additional ₦9.4 billion invested in MoMo PSB. Furthermore, the transaction involved acquiring assets valued at ₦3.38 billion from Acxani Capital.
MoMo PSB, which received its operating licence from the Central Bank of Nigeria (CBN) in 2022, has shown significant growth. For the half-year period ending June 30, 2024, the fintech reported revenue of ₦48.6 billion, marking an 11% increase from ₦43.6 billion in the same period of 2023.
This growth was driven primarily by its airtime lending product, Xtratime, and increased adoption of its mobile money services. The number of active MoMo PSB wallets surged by 73.9%, reaching 5.5 million by the end of the second quarter of 2024, an increase of 701,000 from the first quarter. The number of MoMo PSB agents also grew by approximately 498,000 to a total of 239,000, with transaction volume seeing a 33.4% year-on-year increase.
However, the cash held on behalf of MoMo PSB customers saw a substantial decrease of 72%, dropping to ₦2.15 billion from ₦7.6 billion at the end of 2023. Additionally, as of the end of the first half of 2024, the company reported a liability of approximately ₦26.6 billion to MTN Nigeria and made payments totalling ₦11.2 billion to MTN Nigeria during this period.
In a related development, Mastercard announced a $200 million (₦3.8 billion) investment in MTN Group’s fintech arm in February 2024, acquiring a 3.8% minority stake. This investment followed Mastercard’s earlier announcement, made six months prior, regarding its intention to acquire a minority stake in MTN MoMo.