South Africa’s MTN looks to sell off subsidiaries in Liberia, Guinea, Guinea-Bissau

As it was announcing its results for the first quarter of 2023, MTN said it was considering an offer from Madagascar conglomerate Axian to acquire the South African group’s subsidiaries in Guinea, Guinea-Bissau and Liberia.

“The agreement has not been finalised and there is no guarantee that the transaction will take place,” says US news agency Bloomberg.

The head of Axian, Hassanein Hiridjee, told us he did not wish to comment “beyond what has been written [by MTN]”. Two experts in the sector, well aware of the movements of mergers and acquisitions, say they have no information on these negotiations, which are being conducted in strict confidence.

Withdrawal from the Middle East

MTN operates in 18 countries, 17 of which are in Africa. The group has been implementing its new ‘Ambition 2025’ strategy for the past three years, reviewing its portfolio to focus on its most dynamic markets and reduce its exposure to financial, legal and reputational risks.

2020 saw the beginning of MTN’s withdrawal from the Middle East with the sale of its Syrian assets to Saudi Teleinvest. In 2021, the operator exited Yemen, selling its shares to Emerald International Investment LCC, a subsidiary of Zubair Investment Center LLC, the company’s minority shareholder.

In August 2022, MTN, which is still seeking to sell its 49% stake in a joint venture in Iran, received an offer of $35m to unload its subsidiary in Afghanistan. The deal with MINT Trading Middle East Limited – a wholly owned subsidiary of the Lebanese M1 Group, set up by Taha Mikati and Najib Mikati, who are also shareholders in MTN Group – is expected to be completed in the second quarter of 2023, subject to regulatory approval.

Three small businesses

In terms of financial performance, the three markets that MTN CEO Ralph Mupita wants to divest are its smallest operations. Guinea-Bissau, which had a turnover of just over €13m ($14m) in 2022 for 800,000 subscribers, is the smallest and has had a negative gross operating surplus for at least a year. Above all, the group has not managed to increase its average revenue per customer, a key metric in the telecoms sector.

This is followed by Liberia, which had revenues of $73m in 2022, and Guinea, which had revenues of almost $81m in the same year and a gross operating surplus close to zero. The acquisition of these three West African assets would make Axian a major player in the sub-region.

The group is also present in Madagascar and Comoros via the operator Telma, as well as in Tanzania via Tigo Tanzania.

In Togo, it controls Togocom and holds a third of Senegal’s Free Senegal, via its participation in Saga Africa Holding alongside French entrepreneur Xavier Niel and the founder of Teyliom, Senegalese entrepreneur Yérim Sow.