Sanlam, a South African insurance group, has sealed a deal to acquire a 60% stake in NMS Insurance Services (NMSIS), the insurance arm of broadcaster MultiChoice.  

This deal involves an upfront cash payment of R1.2bn ($66m) and a conditional earn-out of up to R1.5bn based on future performance. 

NMSIS, a registered micro-insurer in South Africa, underwrites a variety of life and non-life insurance products for over two decades.  

These include installation, funeral, device, subscription and debt waiver insurance solutions. 

The company’s financial performance for the year ending 31 March 2024 showed year-on-year growth, with gross written premium surging 36% to R970m and profit after tax growing 51% to R296m.  

The net asset value stood at R277m. 

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This transaction also includes a long-term commercial arrangement between Sanlam and MultiChoice, aimed at extending insurance and financial services to MultiChoice’s customer base that is said to include 21 million households across 50 African countries. 

Sanlam plans to utilise MultiChoice’s customer engagement channels and payment systems to offer a wider array of services.  

Expansion efforts outside South Africa will be supported by SanlamAllianz, a joint venture with Allianz

For MultiChoice, the deal is a move to enhance its service offerings across the continent, with the added benefit of Sanlam’s expertise and technology.  

The proceeds from the sale, which awaits regulatory approvals, will support MultiChoice’s working capital needs. MultiChoice will maintain a 40% stake in NMSIS. 

Sanlam’s oversight of NMSIS will be managed through its Sanlam Fintech cluster, further integrating the insurance operations within its broader financial services ecosystem.  

Sanlam Group CEO Paul Hanratty said: “We are pleased to announce the coming together of Sanlam and MultiChoice to enhance insurance access in Africa. It affords us the opportunity to leverage our respective market footprints and technological capabilities that will support growth and market penetration, as well as provide opportunities to realise synergies for the benefit of all stakeholders.”  

MultiChoice CEO Calvo Mawela said: “This collaboration with Sanlam is a strategic milestone for MultiChoice. It not only allows us to increase the value we provide to our subscribers, but also enables us to leverage Sanlam’s expertise to drive growth and innovation in our insurance offerings across the continent. It is a nod to the incredible work done by our teams.”