MTN Group has reached an agreement to acquire IHS Towers, the world’s largest independent tower operator, at an enterprise value of approximately $6.2 billion.
The deal will return thousands of telecoms towers previously built and operated by MTN in Nigeria to the company.
The transaction follows weeks of negotiation and was unanimously approved by the board of IHS Towers, which recommended it to shareholders.
MTN, which already held roughly 24 percent of IHS on a fully diluted basis, has committed to vote its shares in favour of the deal.
Long-term investor Wendel has also pledged support, bringing total committed backing to more than 40 percent of shareholders. Completion is subject to shareholder and regulatory approvals.
Under the terms of the merger, IHS shareholders will receive $8.50 per ordinary share in cash, representing a 36 percent premium to the 52-week volume-weighted average price and a three percent premium over the February 4 closing price of $8.23.
The deal will be funded through a combination of MTN’s existing stake rollover, about $1.1 billion in cash from MTN, approximately $1.1 billion from IHS’s balance sheet and the rollover of existing IHS debt. IHS must retain at least $355 million in cash at closing.
MTN Group President and CEO Ralph Mupita said the acquisition would strengthen the company’s strategic and financial position and enhance its ability to support long-term connectivity growth in Africa.
“The transaction gives us a unique opportunity to buy back our towers and strengthen our ability to be partners for progress to the nation-states in which we operate,” Mr. Mupita said.
He added that service standards and governance for IHS customers would continue under the combined structure.
IHS Towers Chairman and CEO Sam Darwish said the agreement provided shareholders with certainty and immediate value.
“The acquisition announcement creates a compelling opportunity that provides certainty and immediate returns for our shareholders, enabling them to crystallise the significant value generated during our strategic review,” Mr. Darwish said.
He noted that the transaction would deepen IHS’s long-standing partnership with MTN and strengthen its footprint across Africa.
Founded in Nigeria in 2001, IHS Towers expanded to operate approximately 40,000 towers across 11 countries.
The company grew by acquiring towers previously built by MTN and other telecom operators in Nigeria and later became one of the largest tower operators globally.
The deal marks a reversal of the industry trend over the past decade, when telecom operators increasingly sold towers to independent companies.
Regaining ownership of the assets will allow MTN to reduce long-term rental costs and gain flexibility for 5G and fibre network rollout.
The transaction is among the largest digital infrastructure deals in Africa. Advisors on the deal include J.P. Morgan for HIS and BofA Securities and Citigroup Global Markets for MTN.
