IHS Towers’ profit squeeze forces asset sales as MTN steps in to absorb $4.8bn debt burden

Years of rapid, debt-backed expansion have caught up with IHS Holding Limited, forcing the Africa-focused tower giant into a sweeping restructuring that has now culminated in a takeover by MTN Group, a deal that transfers nearly $4.8 billion in infrastructure-linked debt onto the telecom operator’s balance sheet.

The agreement, which values IHS at roughly $6.2 billion on an enterprise basis, will see MTN pay about $2.2 billion in cash to acquire the approximately 75 percent stake it does not already own.

More significantly, MTN will assume responsibility for the tower company’s sizeable debt pile at a time when rising energy costs, foreign exchange losses and refinancing pressure have steadily eroded IHS’s earnings strength.

The transaction represents a decisive response to mounting financial strain inside IHS. The company expanded aggressively across Africa and parts of Latin America over the past decade, funding growth largely with dollar-denominated borrowings. But sharp currency depreciation in key markets, particularly Nigeria, inflated debt servicing costs just as diesel prices surged in off-grid environments where thousands of towers rely on generators for power.

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By the third quarter of 2025, IHS carried borrowings of $3.27 billion, about 85 percent of which were denominated in foreign currencies. Although the company continued to post relatively strong operational metrics, including adjusted EBITDA margins in the high-50 percent range and steady organic tower additions, its bottom line felt the strain of exchange-rate volatility and elevated operating expenses. Long-term lease contracts, while providing revenue visibility, limited its ability to quickly adjust pricing in response to cost shocks.

With significant maturities looming in 2026 and 2027, management turned to asset disposals to shore up liquidity and trim exposure. In 2025, IHS completed the sale of its Rwandan operations, comprising 1,467 sites.

The retrenchment intensified in February 2026. On February 11, the company agreed to divest its 51 percent stake in Brazil’s I-Systems. Less than a week later, it struck a deal to sell approximately 8,860 tower sites across Brazil and Colombia to Macquarie Asset Management for about $952 million in enterprise value.

Those transactions narrowed IHS’s geographic footprint and generated fresh cash, but they also underscored the depth of the balance sheet squeeze.

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The MTN acquisition now offers a more permanent solution, folding IHS into a stronger financial structure and removing the refinancing overhang that has shadowed standalone tower operators in volatile markets.

For MTN, the move is both defensive and strategic. The group, which historically accounted for roughly 62 percent of IHS revenue, largely from Nigeria, effectively secures control over nearly 29,000 African towers after recent divestments. By internalizing infrastructure it once leased, MTN expects to capture substantial savings over time, with projected efficiencies estimated at around $1.1 billion.

Direct ownership also provides greater flexibility in accelerating 5G rollout, expanding fibre connectivity and implementing energy-optimization strategies across diesel-dependent sites.

The acquisition will push MTN’s net debt closer to $4.8 billion, lifting leverage into the 1.0x to 1.2x range. Even so, the group’s cash flow profile and liquidity position are seen as sufficient to absorb the increase without undermining financial stability.

The merger, structured under Cayman Islands law, remains subject to shareholder and regulatory approvals in multiple jurisdictions. MTN already controls more than 40 percent of the voting support required to advance the deal.

Once completed, IHS will operate within MTN’s digital infrastructure arm as a standalone unit to preserve operational continuity. Existing third-party contracts, including tenancies from competing operators, are expected to remain intact.

At a broader level, the takeover highlights shifting realities in African telecom markets. Currency instability and energy volatility have altered the economics that once favoured outsourcing tower assets.

As profitability tightens, scale alone is no longer a sufficient buffer against macroeconomic shocks. For IHS, the sale closes a chapter defined by leveraged growth and cross-border expansion. For MTN, it marks a calculated bet that owning critical infrastructure outright may deliver stronger long-term returns, even if it means absorbing billions in debt today.