MTN Group’s proposed acquisition of IHS Holding is expected to raise the telecoms giant’s leverage and increase its exposure to Nigeria, according to a commentary note from Moody’s Ratings.
MTN Group Limited recently confirmed it is in advanced talks to acquire the remaining 75% stake in IHS Holding Limited at a price close to its latest New York Stock Exchange trading level. The transaction places IHS’s equity value at roughly $2.7 billion, with MTN expected to pay around $2.0 billion.
Taking MTN’s available liquidity into account, Moody’s analysts said they do not anticipate the acquisition to be fully debt funded. Nevertheless, analysts expect the deal to modestly increase leverage and deepen the company’s exposure to Nigeria. If completed, MTN would fully consolidate IHS into its accounts.
Under the assumption of partial debt funding, MTN’s consolidated Moody’s-adjusted leverage would rise to a pro forma 2.9x for 2024 and 2.3x for 2025, compared with the 2.4x reported for 2024 and 2.0x projected for 2025 before the transaction.
“We would expect MTN’s consolidated leverage to trend downward below 2.0x in the next 12 to 18 months”, Moody’s said, adding that the modest increase in leverage is the main driver of the near term credit negative effect of the transaction.
However, analysts noted that the overall impact would not be significant because MTN would fully consolidate IHS’s EBITDA, reduce its tower lease liabilities, and strengthen cost control measures that provide a path for gradual deleveraging over time.
At the holding company level, leverage implications will depend on where the acquisition debt is raised. If the debt is incurred at the IHS level on a non-recourse basis, MTN’s holding company leverage would remain broadly unchanged. However, if debt is raised at the holding company level and the acquisition is partly debt funded, leverage would increase from about 2.8x at year-end 2024 to around 3x to 3.4x, Moody’s stated.
“We do not expect a fully debt-funded acquisition because of MTN’s available liquidity, including ZAR15.7 billion or $0.9 billion cash at the holding level as of 30 June 2025.
“The acquisition would also increase MTN’s exposure to Nigeria, where IHS generates around two-thirds of its revenue and EBITDA and operates around 41% of its towers.
“This further exposes MTN to a challenging operating environment characterised by FX shortages, high inflation, and regulatory uncertainty, heightening the group’s earnings vulnerability”.
Despite the risks, MTN is expected to benefit from the deal by reducing external tower lease liabilities with IHS. The company operates most of MTN Nigeria’s tower infrastructure, and its leases have historically included US dollar-linked escalators, contributing to significant foreign exchange losses, including ZAR42 billion or $2 billion in 2023–24.
Following consolidation, lease liabilities and costs would become intercompany charges, eliminating external lease liabilities and meaningfully reducing MTN’s lease-related debt and volatility.
The transaction builds on the 2024 renegotiation of Nigerian tower lease terms, which replaced dollar-indexed escalators with power-linked mechanisms better aligned with naira-based operating costs.
Moody’s said full ownership would further align tower-related economics with MTN Nigeria’s local currency cash flows, improving margin stability and supporting the recovery of the Nigerian business. It would also give MTN greater control over essential tower infrastructure, enhancing its ability to manage capital expenditure, optimise investment cycles, and reduce reliance on third-party tower operators.
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