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Tencent has been a defining investment for Naspers.
IPO SZN

The most valuable company in Africa is set to create Europe’s biggest internet company

By Yomi Kazeem

A long-held ambition of Naspers, Africa’s most valuable company, has been to narrow the margin between its market value and the value of its wildly successful $32 million investment for a 46.5% stake in Tencent, the Chinese internet company, back in 2011.

With that stake now worth $134 billion—about 30% more valuable than Naspers itself—CEO Bob van Dijk has been increasingly vocal about exploring ways to close that gap, including courting a wider pool of investors beyond South Africa’s capital markets where Naspers is currently listed.

Naspers’ latest move is to form a NewCo, a new group comprising of its international internet assets, which will be listed on Euronext, the European stock exchange based in Amsterdam. (The company says an official name for NewCo will be announced in coming months.) Naspers will own approximately 75% of NewCo and will retain its primary listing on the Johannesburg Stock Exchange after the proposed listing scheduled for the second half of 2019, the South-Africa based company said in its statement.

While forming and listing NewCo on Euronext in Amsterdam opens Naspers up to a larger capital pool, crucially it also trims its weighting on the Johannesburg Stock Exchange—currently around 25%.

NewCo is “likely to become the largest listed consumer internet group in Europe by asset value,” Naspers claimed in its statement. Those assets include its Tencent stake (now down to 31%) as well as investments in Swiggy, the Indian e-commerce startup and Mail.Ru, a major Russian internet platform. The company has also made other savvy international bets and more than doubled its $616 million investment in Flipkart, the Indian e-commerce company, when it sold its 11% stake for $1.6 billion last May.

The formation of the group comes a month after Naspers completed the process of listing MultiChoice Group, its video entertainment arm, as a separate entity on the Johannesburg Stock Exchange as part of van Dijk’s strategy to transform the century-old former newspaper publisher into “a global consumer internet company.” Following the unbundling of MultiChoice Group, Naspers’ revenues and profits now entirely come from its internet companies.

But while it has pursued international internet investments, seemingly in a bid to replicate its success with Tencent, Naspers has also been keen to stress its continued interest in making internet bets closer to home: last October, it announced plans to invest $314 million in tech businesses in South Africa over the next three years.

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