- MultiChoice and Sanlam, a South African insurance and financial services provider, have agreed to acquire 60% of MultiChoice’s insurance business, NMS Insurance Services (NMSIS).
- The agreement also includes a long-term commercial arrangement to expand insurance and related financial service offerings into MultiChoice’s African subscriber base.
- Sanlam will pay MultiChoice an upfront cash consideration of R1.2 billion, as well as a potential performance-based cash earn-out of up to R1.5 billion, contingent on the amount of gross written premium generated (GWP) by NMSIS for the fiscal year ending December 31, 2026.
Sanlam's acquisition announcement comes after its net operational earnings report for Q1 2024, which increased by 16% due to improved investment returns. Following this, MultiChoice will own 40% of NMSIS and will continue to invest in the venture. It will also use the transaction proceeds for working capital.
The transaction will also allow Sanlam and its affiliates to cross-sell financial services products to MultiChoice’s subscriber base, leveraging MultiChoice’s engagement channels and integrated payment collection capabilities.
According to Sanlam, opportunities outside of South Africa will be facilitated through SanlamAllianz.
Regarding the transaction, Sanlam Group CEO Paul Hanratty and MultiChoice CEO Calvo Mawela see the collaboration as an opportunity for growth and market expansion.
NMSIS is a micro-insurer and financial services provider that has been writing insurance for MultiChoice's DStv brand for the past 20 years, specialising in device, installation, funeral, subscription waiver, and debt waiver insurance products.
Sanlam stated that the acquisition will assist NMSIS in meeting its goal of expanding its local product offering and geographic presence throughout Africa, which will necessitate an increase in resources, expertise, and technology. Meanwhile, Sanlam will oversee the NMSIS operations through its Sanlam Fintech cluster.
Furthermore, the acquisition transaction requires regulatory approval from the South African competition and regulatory authorities.
Sanlam's 60% acquisition of NMSIS also comes as MultiChoice Group is on the edge of being acquired by a French media company, Canal+, which has been increasing its stake in the group, reaching over 40%, and is in talks to buy the company for R35 billion.
