Shanduka Group Acquires Minority Stake In MTN Nigeria

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VENTURES AFRICA – Shanduka Group, a leading South African Black Economic Empowerment investment holding company, via its wholly owned subsidiary Shanduka Telecommunication Mauritius, has paid $335 million to acquire a minority stake in MTN’s Nigerian business from three private investors – making it its biggest investment outside its home market.

Speaking on the acquisition, Shanduka Group CEO, Phuti Mahanyele was quoted saying: “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”

MTN Nigeria is the largest subsidiary of MTN Group, Africa’s largest mobile operator. As the largest mobile operator in Nigeria, it controls about 48 percent of the Nigerian telecom market with over 45 million subscribers as at the end of September 2012; contributing nearly 30 percent of MTN’s first-half revenue.

Although Shanduka did not say exactly how much it owns of the Nigerian unit, MTN holds a 78.8 percent stake in the Nigeria unit.

According to London-based group Pyramid Research, Nigeria’s telecom sector should grow 6% over the next five years.

“Nigeria is the most populous country on the continent and is an important market from a consumer perspective,” says Shanduka Chief Executive Phuti Mahanyele.

Mahanyele says the group also is talks with two partners to bid for an electricity distribution company in Nigeria.

Standard Chartered alerted Shanduka Group to the opportunity and helped finance the purchase through debt and equity, Shanduka said.

Shanduka Group, which is founded and controlled by South African politician and millionaire, Cyril Ramaphosa, is 25-percent owned by China’s sovereign wealth fund following the China Investment Corporation $226-million payment for a quarter of Shanduka last year.

It has investments in varied sectors including mining, energy, real estate, telecommunication companies and financial services. It also operates the local franchise of fast food chain McDonald’s.

The investment company is a black-owned investment holding company whose mission includes helping historically disadvantaged South Africans.

Shanduka is not the only south African company hat have pitched its tent in to the Nigerian market, South African firms like Nedbank Group Ltd. formed a partnership with Nigeria’s Ecobank this year and food business Tiger Brands Ltd. acquired stakes in Dangote’s flour and pasta business.

Other SA companies have also ventured into the local consumer market. This week, FirstRand, a leading South African bank, announced its entry into Africa’s second largest economy after the Central Bank of Nigeria (CBN) approved its banking license.