January 26, 2022

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Airtel Africa Buyout Minority Interest. All things you should know

Airtel Africa Buyout Minority Interest. All things you should know
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Airtel Africa has offered to buyout the minority interest of Airtel Nigeria. This deal date is unknown. The telecommunications company is listed in the Nigerian Exchange Group (NGX) Limited. According to the deal, Airtel Africa will pay 55.81 Naira per share. This is a total of 61.24 billion Naira. The implication is that an acquisition of a total of 1.09 billion minority shares.

What Airtel Africa Buyout mean?

A buyout is the outright acquisition of a company, either through shares or cash, or both. Thereby having total control over the company. The Share buyout by Airtel Africa implies that the company is taking full control of its Nigerian subsidiary.

In other words, Airtel Africa has a controlling interest in Ariel Nigeria with certain minority interests having a tip of rights. However, the company is buying the shares of these minority interest groups. That means taking their rights and control and gives the telco giant total control of the subsidiary.

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When this happens, the minority interest shareholders will be paid in cash and/or shares. But, the modality is unclear. If they are paid in cash, it is likely the minority shareholders will pay capital gain tax, if the buyout price is higher.

Airtel Africa shares are sold at 760 Naira per share. In the late data at the NGX. If the buyout involves giving out shares of the company, the minority interest shareholders stand to gain more. Whatever the case, the shareholders stand to gain.

More so, Airtel Africa will gain in the fronts. First, the value of the company will rise as a result of the buyout. Also, this may push the shares price at the Nigerian Exchange Group above the current 760 per share value.

Conclusion

Airtel Africa is planning on a buyout. This is a form of M&As. But this time, it is acquiring its Nigerian subsidiary minority interest shares for 55.81 Naira per share. If this pulls through, the company valuation goes up and may reflect in the price of its shares.

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