Sanlam and MultiChoice have entered into an agreement in which Sanlam will acquire a 60% stake in MultiChoice’s insurance business, NMS Insurance Services (NMSIS). Sanlam will make an upfront cash payment of R1.2 billion, with an additional potential performance-based earn-out of up to R1.5 billion, contingent on NMSIS achieving specific gross written premium targets by the end of 2026.
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The agreement includes a long-term commercial arrangement to expand insurance and financial service offerings across MultiChoice’s extensive African subscriber base. MultiChoice will retain a 40% stake in NMSIS, allowing it to benefit from the high growth potential of this segment while maximizing shareholder value.
MultiChoice plans to use the proceeds from the transaction for working capital. The partnership will enable Sanlam and its affiliates to cross-sell financial services products to MultiChoice’s engaged subscriber base of 21 million households across 50 African countries. Sanlam will utilize MultiChoice’s engagement channels and integrated payment collection capabilities to deliver these offerings.
Opportunities outside South Africa will be facilitated through SanlamAllianz, a joint venture between Sanlam and Allianz. MultiChoice CEO Calvo Mawela described the collaboration as a strategic milestone, enhancing value for subscribers and leveraging Sanlam’s expertise to drive growth and innovation in insurance offerings across the continent.
NMSIS is a registered South African composite micro-insurer and authorized financial services provider, licensed to underwrite both non-life and life insurance products. It has been offering insurance under the DStv brand for 20 years, focusing on device, installation, funeral, subscription waiver, and debt waiver insurance products.
For the year ending 31 March 2024, NMSIS reported a 36% year-on-year increase in gross written premium to R970 million and a 51% increase in profit after tax to R296 million. Its net asset value stood at R277 million.
Sanlam will manage NMSIS operations through its Sanlam Fintech cluster. The transaction is subject to regulatory approvals from South African competition and regulatory authorities.
