MultiChoice is set to finalize the sale of a 60% stake in its insurance business, NMS Insurance Services (NMSIS), to insurer Sanlam by the end of November. In a joint statement issued today, the companies announced that all conditions precedent to the transaction have been fulfilled, including approvals from the Competition Tribunal and the Prudential Authority. As a result, the transaction has now become unconditional.
The transaction will become effective on 30 November, at which point MultiChoice will receive an upfront cash consideration of R1.2 billion for its stake in NMSIS. Additionally, there is a potential performance-based cash earn-out, measured as of 31 December 2026, which could provide MultiChoice with up to an additional R1.5 billion.
This announcement follows a recent interview with MultiChoice group CFO, Tim Jacobs, who highlighted that the company is relying on this multibillion-rand deal to sell the 60% stake in order to navigate out of technical insolvency. At the time of the interview, Jacobs mentioned that the companies were only awaiting approval from the Prudential Authority before finalizing the deal.
MultiChoice has been grappling with technical insolvency due to non-cash accounting entries at the end of the last financial year. The company is addressing this issue through the Sanlam transaction, among other initiatives.
In June, Sanlam and MultiChoice entered into an agreement for Sanlam to acquire a 60% stake in MultiChoice’s insurance business, NMSIS. The agreement also includes a long-term commercial arrangement aimed at expanding insurance and related financial service offerings to MultiChoice’s African subscriber base. With the transaction now set to close, MultiChoice is poised to receive a significant cash infusion, which will help stabilize its financial position and support its ongoing business initiatives.
