South African Firm Set to Acquire Stake in MultiChoice's Business

• South African insurance company Sanlam Limited is set to acquire a huge stake in the insurance subsidiary of MultiChoice Group.
• Both companies made the disclosure, admitting that the partnership will create synergies that will benefit all stakeholders involved
• The deal comes amid MultiChoice's legal troubles in Nigeria over protests against its recent subscription price hikes for its DStv and GOtv packages

Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.

Sanlam Limited, an insurance company based in South Africa, is poised to purchase a 60% stake in NMS Insurance Services, the insurance division of MultiChoice Group, for R1.2 billion (approximately N99.14 billion).

In a joint announcement, the companies disclosed that the agreement features a long-term commercial partnership to broaden the scope of insurance and related financial services available to MultiChoice's large subscriber base across Africa.

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Legit.ng earlier reported that French media conglomerate Groupe Canal+ obtained a 40.01% stake in MultiChoice, ending ongoing speculations regarding a prospective merger.

Sanlam plans to take 60% stake in MultiChoice

Beyond the initial cash payment, a performance-based earn-out could go higher, depending on the gross written premium produced by NMSIS by the end of the financial year on December 31 2026.

MultiChoice, which recently suffered a revenue loss in the full fiscal year concluding 2024, indicated that the cash proceeds from this deal would be allocated for working capital while maintaining a 40% stake in NMSIS.

Sanlam Group CEO Paul Hanratty remarked that the agreement allows the company to utilize its combined market presence and technological strengths.

He said that the strategic move is expected to facilitate growth, enhance market pen*tration, and create synergies that will benefit all stakeholders involved.

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MultiChoice CEO Calvo Mawela described the partnership with Sanlam as a significant strategic achievement for the company.

He added:

"It not only allows us to increase the value we provide to our subscribers but also enables us to leverage Sanlam’s expertise to drive growth and innovation in our insurance offerings across the continent."

According to Reuters, the companies stated that the deal allows Sanlam to further broaden its insurance and financial services operations across Africa. Expansion outside South Africa will be managed through its SanlamAllianz business.

MultiChoice has a subscriber base of 21 million households across 50 African nations, while Sanlam is active in 31 countries, including eight of Africa's ten largest economies.

In Nigeria, a key market for MultiChoice, the pay-TV company faces legal challenges due to a lawsuit from subscribers regarding recent subscription price hikes.

Recently, a tribunal adjudicating the case imposed a fine of N150 million on MultiChoice and mandated a one-month free subscription for all Nigerian subscribers to its DStv and GOtv packages.

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MultiChoice laments N31bn trapped in Heritage Bank

In related news, Legit.ng reported that MultiChoice Group has an account balance of N31.6 billion with the liquidated Heritage Bank.

The pay-TV company disclosed this in its annual report for the 2024 Financial Year ending on March 31, 2024.

This development is troubling for the company, given that the maximum insured amount is limited to the N5 million payout guaranteed by the Nigeria Deposit Insurance Corporation (NDIC).

Source: Legit.ng