MTN Group Proposes $6.2 Billion Acquisition of IHS Towers in Africa's Largest Telecom Infrastructure Deal
South Africa's MTN Group has tabled a $6.2 billion offer to acquire full ownership of IHS Towers, positioning the transaction as one of Africa's largest telecommunications infrastructure consolidations and potentially reshaping the continent's tower ownership landscape.
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MTN Group Limited has proposed a $6.2 billion acquisition of IHS Towers, seeking 100% ownership of the telecommunications infrastructure company in what would represent one of the largest deals in African telecom history. The transaction would consolidate ownership of thousands of cell towers across multiple African markets under the Johannesburg-based operator's direct control.
The proposed buyout comes as African telecommunications operators increasingly seek vertical integration to reduce operational costs and gain greater control over critical infrastructure. IHS Towers, currently one of Africa's largest independent tower companies, operates approximately 30,000 towers across Nigeria, Cameroon, Côte d'Ivoire, Rwanda, and Zambia. According to Techpoint Africa, the deal would transfer complete ownership of IHS's shares to MTN Group, marking a strategic shift from the tenant-operator model that has dominated African tower infrastructure for the past decade.
MTN Group's infrastructure expenditure has historically represented a significant portion of its capital allocation, with the company spending approximately $1.8 billion annually on network investments across its 19-market footprint. The acquisition would eliminate substantial lease payments MTN currently makes to IHS Towers, potentially improving the operator's EBITDA margins by 3-5 percentage points based on industry analyst estimates. "This consolidation reflects broader trends in African telecommunications where operators are reassessing the build-operate-transfer models that dominated the 2010s," according to infrastructure financing data from the GSMA.
IHS Towers completed its New York Stock Exchange listing in October 2021 at a valuation of approximately $7 billion, making it one of the few African infrastructure companies traded on a major U.S. exchange. The company's market capitalization has fluctuated between $4.2 billion and $8.1 billion since listing, reflecting currency volatility in key markets and regulatory challenges, particularly in Nigeria where foreign exchange restrictions have complicated repatriation of revenues. The proposed $6.2 billion valuation represents a premium to recent trading levels but remains below the company's IPO valuation, suggesting MTN may have identified a strategic window for the acquisition.
The transaction structure has not been fully disclosed, though industry observers expect a combination of cash and debt financing given the deal's magnitude. MTN Group reported cash and cash equivalents of approximately $2.1 billion as of its most recent financial reporting period, indicating the company would likely require substantial debt facilities or equity raises to complete the transaction. South African banks including Standard Bank and FirstRand, along with international development finance institutions, are expected to participate in financing arrangements should the deal proceed to completion.
Regulatory approvals across multiple jurisdictions will present significant hurdles for deal completion. Nigeria's Federal Competition and Consumer Protection Commission, South Africa's Competition Commission, and regulatory authorities in Cameroon, Côte d'Ivoire, Rwanda, and Zambia must all approve the transaction. Nigerian regulatory scrutiny may prove particularly intensive given IHS Towers' dominant market position, where the company controls approximately 45% of the country's telecommunications tower infrastructure. Competition authorities typically require 6-18 months to complete reviews of transactions of this scale in African markets.
The proposed acquisition signals a potential reversal of the tower infrastructure outsourcing trend that gained momentum across Africa during the 2010s. Major operators including Airtel Africa, Vodacom, and Orange sold tower assets to independent companies including IHS Towers, American Tower Corporation, and Helios Towers to monetize infrastructure and reduce balance sheet leverage. MTN itself sold approximately 5,500 towers to IHS and American Tower between 2015 and 2018, generating proceeds of roughly $1.3 billion that were redeployed into spectrum acquisitions and network modernization.
Market analysts will scrutinize whether MTN's proposed vertical integration delivers projected cost savings or whether the capital-intensive nature of tower ownership diverts resources from 5G network deployment and digital services expansion. The company has committed to investing $5 billion in network infrastructure through 2027, with significant allocations planned for fiber-to-the-home rollouts and data center capacity across key markets. Absorbing IHS Towers' operations would add substantial maintenance obligations and energy costs to MTN's operational profile, particularly in markets where grid electricity remains unreliable and diesel generator dependency drives high operating expenses.
The transaction's completion would reshape competitive dynamics in African tower infrastructure, potentially triggering similar consolidation moves by rival operators. Airtel Africa and Orange have both explored tower acquisitions in recent quarters, though neither has announced transactions approaching the scale of MTN's proposed IHS buyout. American Tower Corporation and Helios Towers, the continent's other major independent tower companies, may face increased pressure to demonstrate value to shareholders if the tenant-operator model loses favor among major telecommunications groups.