Video entertainment group MultiChoice hopes to finalise the sale of a 60% stake in its insurance business NMS Insurance Services (NMSIS) to insurer Sanlam by the end of November.
The companies issued a joint statement today, saying they are pleased “to advise that all the conditions precedent to the transaction have been fulfilled, including approvals from the Competition Tribunal and the Prudential Authority, and that the transaction has now become unconditional”.
According to the companies, the transaction will become effective on 30 November, upon which date, MultiChoice will receive an upfront cash consideration of R1.2 billion for its NMSIS stake, with a potential performance-based cash earn-out, measured at 31 December 2026, of up to a maximum additional consideration of R1.5 billion.
The announcement comes less than a week after MultiChoice group CFO Tim Jacobs told ITWeb in an interview that the firm is pinning its hopes on its multibillion-rand deal to get out of the murky waters of technical insolvency.
At the time, Jacobs said the companies were waiting for the go-ahead from the Prudential Authority before sealing the deal.
MultiChoice found itself technically insolvent from non-cash accounting entries at the end of the last financial year, and is working to address this through the Sanlam transaction, among other initiatives.
In June, Sanlam and MultiChoice entered into an agreement for Sanlam to acquire 60% of MultiChoice’s insurance business NMSIS, as well as a long-term commercial arrangement to expand insurance and related financial service offerings to MultiChoice’s African subscriber base.
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