Zimbabwe: Econet wants to buy EcoCash’s fintech companies for around $59 million

April 3rd 2024

Africa, Fintech, ICT News, Zimbabwe

Telecoms company Econet Wireless Zimbabwe has revealed plans to buy the financial technology businesses of EcoCash Holdings Zimbabwe Limited (EcoCash) for approximately $58.97 million. The transaction will be subject to approval by EcoCash shareholders at the extraordinary general meeting to be held on April 17.

“  The proposed transaction is a reconstruction plan under which EcoCash Holdings will transfer to Econet all the shares it holds in the financial technology companies, valued at 509 billion Zimbabwe dollars [22.3 million USD] (equivalent to 521,861 057 Econet shares), so that fintech companies will become subsidiaries of Econet  ,” Econet explained in a statement released on Tuesday, April 2.

In 2018, Econet transferred its fintech business to EcoCasch Holdings which then became a separate company and went public. This separation was inspired by the experience of telecoms groups like Airtel Africa and MTN Group. The initiative was mainly aimed at promoting its fintech activity rightly and attracting new international investors. However, it did not achieve the expected results, particularly due to the unfavorable economic conditions that have prevailed in Zimbabwe since the split.

By bringing the entities together, Econet says it can streamline operations, improve efficiency and offer a more comprehensive range of products and services to its customers. “Once the restructuring is finalized, some of the duplicative activities will be eliminated, enabling faster decisions and reducing costs  ,” the mobile company said.

This should allow Econet to strengthen its hegemony in the Zimbabwean telecoms market. According to statistics from the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), Econet had a 71.1% market share in the mobile telephony segment at the end of the fourth quarter of 2023. Its competitors NetOne and Telecel controlled 26.7% and 2.2% market shares respectively.

Source: Agency EcoFin

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