African telecoms group MTN has agreed to buy a third of Africa Internet Holding (AIH), an internet company currently owned by Millicom and Rocket Internet.
Financial details have not been disclosed but media and telecoms group Millicom said that AIH…
African telecoms group MTN has agreed to buy a third of Africa Internet Holding (AIH), an internet company currently owned by Millicom and Rocket Internet.
Financial details have not been disclosed but media and telecoms group Millicom said that AIH “will become an associate of Millicom, MTN and Rocket Internet with each partner owning one third of the share capital and having equal representation on the board of the company”.
AIH, which is present in 13 African countries, says it offers various services including real estate classifieds, e-commerce and hotel booking, among several others.
According to Millicom CEO Hans-Holger Albrecht, the two telcos have 220 million mobile customers in the continent “with very limited overlap”.
He added: “One year after first investing in these ventures, we are more convinced than ever about the potential for African online services to grow strongly and leapfrog traditional retail.
“We are at the same time extremely positive about the synergies between running a mobile business and offering online services, through the opportunities to leverage the distribution network, the customer base and the payment infrastructure.”
The deal is expected to close in Q2 2014, subject to regulatory approvals. Millicom said that, as a result of the new agreement, it will consolidate AIH using the equity method, no longer fully consolidating AIH revenues and EBITDA, in line with its equity ownership of the business.
Rocket Internet declined to comment while MTN and Millicom could not be reached.
Meanwhile, MTN has reportedly been in talks with local and smaller rival Telkom for the latter’s loss-making mobile unit. Reports recently suggested that any alliance between the two may take the form of an infrastructure sharing agreement.
