A pay-TV company, MultiChoice, is set to receive R1.2 billion ($67 million) in cash by the end of November through the sale of its insurance subsidiary, NMS Insurance Services (NMSIS), to Sanlam Life.
This deal, which was announced in June and has now been approved by South African regulators, allows Sanlam Life to continue selling long-term insurance policies to MultiChoice customers.
The agreement includes a potential additional payment of up to R2.7 billion ($150 million) based on performance targets related to the gross premium earned by NMSIS for Sanlam by the end of 2026.
In the fiscal year ending in March 2024, NMSIS experienced significant growth in gross written premium and profit after tax, providing insurance policies for MultiChoice customers.
This transaction will offer MultiChoice additional liquidity following recent financial results that showed some challenges, including revenue growth in H1 2024 being offset by profit reductions due to currency devaluation in key markets.
MultiChoice aims to refocus on its other services, such as its fintech product and sports and entertainment arm, after selling off its insurance subsidiary.
The company is also investing in its local streaming platform, Showmax, to compete with global streaming giants, with a significant increase in its subscriber base in recent years.