(Updates with share price in fifth paragraph.)
Sept. 4 (Bloomberg) -- IHS Holding Ltd., Africa’s largest independent phone tower company, agreed to buy 9,151 Nigerian towers from MTN Group Ltd. in a deal valued at about $2 billion, according to two people familiar with the transaction.
The people asked not to be named because the financial terms are confidential. The plan will reduce MTN’s Nigerian operating costs and expand voice and data capacity, the companies said in a statement. IHS will have full operational control of the new company. The venture will invest more than $500 million over four years in upgrades and maintenance to improve the Nigerian network.
IHS Chief Executive Officer Issam Darwish, speaking in a telephone interview, declined to comment on the value today, as did Chris Maroleng, a spokesman for MTN. IHS completed its purchase of MTN’s towers in Rwanda and Zambia in May. Bloomberg reported on talks for the Nigerian assets last month.
IHS agreed to buy 2,000 towers from Etisalat Nigeria in August. Mobile phone carriers are selling the towers, which are more expensive to run in Africa than elsewhere because of the need for backup power sources.
MTN rose 2.1 percent to a record and was up 2 percent at 255.66 rand as of 2:05 p.m. in Johannesburg trading, giving the company a market value of 472 billion rand ($44.3 billion).
Darwish said that Nigeria is particularly appealing because it’s a large country with a lot of potential for mobile broadband growth as more people start using smartphones. Nigeria is “interesting on so many levels,” he said. “It’s the telecom hub of Africa.”
IHS plans to continue expanding and will have 25,000 towers in total by the end of next year, Darwish said.
MTN is looking for deals and has overhauled management in its fastest growing markets as it looks for growth outside of South Africa, where revenue is being constrained by price cuts and regulations.
IHS raised more than $1.5 billion in the 12 months through March from investors including Goldman Sachs Group Inc and the IFC Global Infrastructure Fund to use for acquisitions and building out its network.