MTN plans to inject R4.3bn into a venture with Rocket Internet

Tech Financials

MTN Group, Africa’s biggest mobile phone operator, plans to invest R4.3bn (EUR300m) over the next two to four years into Africa Internet Holdings (AIH) and Middle East Internet Holding (MEIH) to pursue e-commerce opportunities in Africa and the Middle East

The South African-based group says the investments are subject to regulatory approval, and the two transactions are expected to close during the first and second quarter of 2014 respectively.

“Through MEIH, MTN and Rocket aim to accelerate and further develop the nascent e-commerce market in the Middle East region,” says Sifiso Dabengwa, MTN Group President and CEO.

This follows announcement that MTN and the world’s largest Internet incubator Rocket Internet will create a joint venture to develop internet businesses in the Middle East, with MTN and Rocket as 50% shareholders in MEIH.

Rocket Internet already has a presence in several Middle Eastern countries, and has rolled out a series of high-growth online businesses, including Easytaxi, Lamudi, Namshi and Hellofood.

“I am very confident that the strategic partnership between MTN and Rocket Internet is going to accelerate the online shift in the Middle East. With joint forces, Middle East Internet Holding will develop its already existing ventures even better and will launch new companies even faster and more successfully,” says Oliver Samwer, co-founder of Rocket Internet.

On Monday, MTN bought a 33% stake in AIH to be able to develop online ventures across the fast growing internet markets of Africa. Millicom and Berlin-based Rocket Internet will each become 33.3% shareholders in AIH.

MTN said the agreement will enable it to extend online retail and other essential digital services on the African continent. AIH will leverage on MTN’s biggest footprint in Africa and that of Millicom, which has operations in Chad, the DRC, Ghana.

This piece was lifted with permission from Tech Financials

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