Abu Dhabi companies e& and ADQ complete majority acquisition of Starzplay Arabia

E-Vision, entertainment arm of e&, and Abu Dhabi holding company buy 57% stake in video streaming service

Starzplay Arabia has close to 2 million subscribers across 19 countries. Photo: Starzplay

E-Vision, the UAE’s biggest telecoms operator e&’s entertainment arm, and Abu Dhabi holding company ADQ have completed a deal to acquire a majority stake in video streaming service Starzplay Arabia.

The e&-led consortium has finalised the acquisition of a 57 per cent stake in the Middle East and North Africa's fastest-growing video streaming service, e& said in a filing to the Abu Dhabi Securities Exchange (ADX) on Tuesday.

“This acquisition is in line with e&’s strategy to scale up the entertainment segment of e& life consumer digital vertical by accelerating E-Vision’s development on the video streaming segment,” it said.

“It also significantly enhances Starzplay Arabia's positioning across the entire Mena region.”

The acquisition completion follows an initial announcement of the deal in March. Other shareholders of Starzplay Arabia include Starz, SEQ Investors and E-Vision. Starz and its parent company Lionsgate will maintain commercial agreements for content licensing to the venture.

Netflix, the MBC Group's Shahid VIP and UAE-based Starzplay Arabia control two thirds of Mena's over-the-top services (OTT) market in terms of subscriptions, a May report by tech research firm Omdia said.

Shahid VIP and Netflix have a market share of about 22 per cent each, while Starzplay controls 20 per cent of the market, the report showed.

The Abu Dhabi consortium, of which E-Vision owns 66.7 per cent, acquired the controlling stake in Starzplay Arabia.

E-Vision is committed to pay up to $130 million in cash and in-kind, including a component linked to an earn-out, e& said in the bourse filing.

Starzplay Arabia will be consolidated into E-Vision’s financials starting this month, according to the statement.

The deal, which values the platform at $420 million, will inject a cash investment into the business for new content acquisition and producing more original content from the region, Maaz Sheikh, co-founder and chief executive of Starzplay, told The National in August.

“It’s a transformative event for the company and almost like a dream come true for employees and management,” he said at the time.

Starzplay is using the investment to add new content, such as Italy's Serie A, getting rights for AFC (Asian Football Confederation) games, adding UFC to the platform and showing Asia Cup cricket matches live. It will also focus on original shows from the Middle East.

The video streaming service expects annual revenue for 2022 to jump 40 per cent from the previous year, driven by popular content across its anime and sports genres, according to Mr Sheikh.

The platform's revenue in the first six months of 2022 rose 40 per cent year-on-year as the number of subscribers increased by 20 per cent to 2.1 million during the period.

Starzplay aims to reach profitability by the second quarter of 2024, Mr Sheikh said.

The investment in Starzplay Arabia provides ADQ access to a significant subscription video on demand and OTT service providers in the region, Jaap Kalkman, group chief investment officer at ADQ, said in March.

Collaborating with Starzplay Arabia will allow e& to customise content options for its customers and the 5G’s fast download speeds will allow viewers to have immersive experiences using virtual reality and augmented reality, Khalifa Al Shamsi, chief executive of e& life and chairman of E-Vision, said in March.