Sanlam Life, a wholly-owned subsidiary of Sanlam, will acquire a 60% shareholding in MultiChoice’s insurance business, NMS Insurance Services (SA) from MultiChoice.
Sanlam Life is buying NMSIS for an upfront cash consideration of R1.2 billion and a potential performance based cash earn-out, measured at 31 December 2026, of up to a maximum consideration of R1.5 billion.
MultiChoice to retain a substantial 40% interest in NMSIS and 40% in the broader commercial venture with Sanlam, allowing MultiChoice to continue benefiting from the high-growth potential of this segment while maximising value for its shareholders.
A pre-acquisition dividend of R59.0 million will be declared by NMSIS of the assets held in excess of its minimum solvency capital requirement as at its financial year ended 31 March 2024.
As part of the deal, Sanlam said it has entered a long-term commercial arrangement with MultiChoice to expand insurance and related financial service offerings into the broadcaster’s extensive subscriber base of 21 million households across 50 countries on the African continent.
NMSIS is micro-insurer and authorised financial services provider, is licensed to underwrite both non-life and life insurance products. It has been writing insurance for the past 20 years under the DStv brand of MultiChoice focussing on device, installation, funeral, subscription waiver and debt waiver insurance products.
NMSIS has demonstrated robust growth in recent years, increasing its in-force policies by 19% to 3.3 million for the financial year ended 31 March 2024. Life products, introduced three years ago as NMSIS diversified beyond device insurance, experienced rapid growth and account for 30% of in-force policies.
“NMSIS, which forms part of MultiChoice’s fintech vertical, has demonstrated substantial growth and profitability in South Africa, but its growth ambitions to expand its product offering locally and geographic presence across Africa requires a step-up in resources, expertise and technology,” said Sanlam.
“After careful evaluation of available options, MultiChoice found the opportunity to collaborate with Sanlam particularly compelling. Sanlam’s extensive presence and expertise across the African continent, coupled with its track record of success in insurance ventures with non-insurers, positions it strongly for a strategic venture with MultiChoice and NMSIS.”
Through the strategic relationship with Sanlam, MultiChoice gains access to unparalleled insurance expertise, comprehensive financial services resources and access to Sanlam’s financial services operations across Africa to address MultiChoice client needs.
The proceeds received from the Transaction will be utilised within the MultiChoice group for working capital purposes.
Founded in 1918, Sanlam is the largest non-banking financial services group in Africa and is listed on the JSE Limited (“JSE”), Namibian Stock Exchange and A2X Markets. Sanlam operates in 31 countries, including eight of the top ten largest African economies
The Transaction enables Sanlam, through its Sanlam Fintech cluster, to advance its strategy of utilizing technology to expand access to financial services across Africa. “This strategic initiative aligns with Sanlam’s core purpose of helping Africans achieve financial confidence,” said the financial services group.
“MultiChoice’s extensive subscriber base offers Sanlam, and its affiliates, a unique platform and attractive opportunity for cross-selling and cost-effective marketing to an actively engaged subscriber base.
The deal provides Sanlam with an opportunity to further scale its insurance and financial services offering across Africa by leveraging MultiChoice’s and Sanlam’s leading market positions. Opportunities outside of South Africa will be facilitated through SanlamAllianz.
