SOUTH Africa’s largest mobile network company, the MTN Group, has become the largest shareholder in Botswana cellular firm Mascom Wireless Botswana (Mascom), a company founded by Zimbabwean b
usinessman Strive Masiyiwa.
This follows MTN’s US$128 million acquisition of an indirect 44% stake in the mobile operator.
MTN confirmed the acquisition of the Botswana-based mobile operator in a statement last week.
“Shareholders are advised that MTN has acquired an effective indirect interest of 44% in Mascom Wireless Botswana (Proprietary) Ltd, a company incorporated and registered in Botswana,” MTN said.
“The indirect equity interest in Mascom was acquired for an aggregate consideration of approximately US$128 million (based on an average exchange rate of approximately BWP5,5:US$1), implying an average valuation of US$300 million (BWP1,650 million) for 100% of the equity in Mascom.”
The South African mobile operator said its acquisition of an indirect interest in Mascom was part of its strategy to increase its presence in the world’s emerging markets.
“This transaction forms part of MTN’s stated strategy to be the leading mobile operator in developing markets. The above transaction has been effected with the full co-operation of the Econet Wireless Group, an existing indirect shareholder in Mascom,” MTN said.
Mascom founding shareholder Econet Wireless Group, led by Masiyiwa, retains its 32% equity in the company.
As part of the deal, MTN received approval from Econet as the founding shareholder to acquire the stake. Econet, which has preemptive rights to any share disposal, found it “not strategic” at the time to increase its stake in Mascom.
Econet Wireless Group spokesman Sure Kamhunga confirmed the sale of the stake to MTN.
“Yes we were aware of the acquisition by MTN of the shares in Mascom and as MTN stated, the acquisition was made with the full cooperation of the Econet Wireless Group,” Kamhunga said.
He said the company had taken the decision not to increase its stake as it was in the process of ending its bitter marriage with Altech of South Africa and pursuing its legal case against Vee Mobile of Nigeria.
“At the time of the transaction, Econet decided it was not strategic to increase its stake in Mascom because of the group’s other commitments to increase its stake in Vee Mobile,” said Kamhunga.
“In addition, the group was also preoccupied with buying Altech’s shares in the joint venture, Econet Wireless Global, which was dissolved last month.”
Mascom is Botswana’s leading mobile operator with a subscriber base of 412 000, representing a 72% share of the market. Its main rival, Orange Botswana, formerly Vista, controls the remaining 28% of the existing market.