South African Black Economic Empowerment (BEE) group the Shanduka Group has acquired a minority stake in MTN Nigeria in a deal worth US$355 million, the biggest investment the group has made to date outside South Africa.
The Shanduka Group – founded and controlled by politician and trade unionist Cyril Ramaphosa – purchased the stock from three separate private investors, although the exact size of the minority shareholding has not been revealed.
Phuti Mahanyele, Chief Executive Officer of the Shanduka Group, said: “This is Shanduka’s most significant investment in another African country. It is a business that is well established within a market that has great potential for further growth.”
The purchase was made through the group’s subsidiary, Shanduka Telecommunication (Mauritius), and sees Shanduka expand its operations across the African continent.
The BEE Group has divested itself of a number of investments recently in order to free up cash for aggressive acquisition based growth. It now finds itself now in a cash-strong position, which it hopes to capitalise on through investments across the continent, with a particular focus on the faster growing markets such as Nigeria.
MTN Nigeria is the largest mobile operator on the Nigerian market, currently holding approximately 48 percent of the market.
The deal has come under some scrutiny, given that founder of Shanduka Ramaphosa is also the current Chairman of the MTN Group, which owns 78.83 per cent of MTN Nigeria.