Naspers Considers Sale of Nigerian MultiChoice division to MTN Group

  • A sale of MultiChoice won’t include South Africa division
  • Africa’s biggest company focusing on e-commerce investments

Naspers Ltd. is considering the sale of its pay-TV business in Africa as sluggish economic expansion in key markets stifles growth and viewers switch to cheaper online alternatives, according to two people familiar with the matter.

A disposal of MultiChoice won’t include the South African division, which is still highly profitable, said the people, who asked not to be identified as the plans haven’t been made public. A sale is one of a number of options being considered by Africa’s biggest company by market value, and a final decision hasn’t been reached, one of the people said.

Naspers and MTN Group Ltd., Africa’s largest wireless operator, have briefly discussed a deal for MultiChoice Africa, but no agreement was reached, according to one of the people. Both companies confirmed on Thursday that they are still in talks that were disclosed earlier about sharing TV content. MyBroadband, a South African internet news site, reported earlier that MTN was in talks to buy MultiChoice Africa, citing unidentified people.

A sale of MultiChoice Africa would represent a further shift by Cape Town-based Naspers away from its traditional media business, which includes newspapers and MultiChoice’s main product, the DSTV satellite-TV service. Since winning big with a 2001 investment in Chinese technology company Tencent Holdings Ltd., a stake that’s now worth about $107 billion, Naspers has become a serial investor in internet companies around the world, ranging from an online travel agency in India to education software providers in Silicon Valley.

Profit Slump

The value of the Tencent stake is worth more than Naspers’s market value of 1.2 trillion rand ($89 billion), which partly reflects the weak performance of the TV division. While the company arrested a decline in subscriber numbers over the six months through September, earnings before interest, taxes, depreciation and amortization at the unit declined 33 percent to $331 million.

As Naspers charges customers in local currencies, “the continued weakness of currencies and economies in many African countries resulted in lower U.S. dollar revenues,” the company said in its November results presentation.

Nigeria’s economy contracted for the first time in 25 years in 2016 and its currency has depreciated by 37 percent against the dollar over the past 12 months. Sub-Saharan African economies grew by an average of 1.4 percent last year, compared with 3.4 percent in 2015, according to the International Monetary Fund.


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