Naspers, Africa’s largest company by market capitalization, is considering the sale of its pay TV business, Multichoice Africa, owing to slow economic growth in key markets and the growing trend of viewers switching to online alternatives, according to a Bloomberg report on Thursday.
The sale of Multichoice won’t include the South African division, which is still highly profitable.
MTN Group Ltd., is said to be in talks with Naspers discussing a deal for Multichoice Africa, but no agreement was reached. Both companies confirmed on Thursday that they are still in talks that were disclosed earlier about sharing TV content.
Naspers has been transitioning into a serial investor in internet companies around the world due mainly to the success of its investment in Chinese internet giant, Tencent, where the Cape Town-based company’s stake is worth $107 billion.
In September last year, Naspers reported that its internet division accounted for 72 percent of its total revenue of $6.8 billion. But the company reported that its television and entertainment unit which includes Multichoice was jammed by weak currencies across the continent even though total subscribers reached 11 million. As a result, the division posted an 8 percent drop in revenue to $1.6 billion, while trading profits fell 43 percent to $226 million.
A sale of Multichoice Africa would represent a further shift by Naspers away from its traditional media business, which includes newspapers and Multichoice’s main product, the DSTV satellite-TV service.
With a valuation of about $90 billion, Naspers is a global internet and entertainment company with operations in 130 countries. The company has made investments in internet companies, including Konga, a Nigeria-based online retailer; and OLX, a classifieds website.
Last week ,Naspers announced that it will be investing €387 million for a minority stake in Germany-based Delivery Hero, the leading global online food ordering and delivery marketplace, at a valuation in line with Delivery Hero’s previous valuation. Delivery Hero is the largest food network in the world with more than 150,000 restaurant partners and leading brands such as foodora, Yemeksepeti, Talabat.com, pizzaonline, and more.