Dubai-based entertainment streaming service OSN+ and Nasdaq-listed Anghami are merging their businesses to create one of the Middle East’s largest streaming platforms, to better compete with international rivals such as Spotify and Netflix.
The deal to combine the two companies involves cash investment of up to $50 million from OSN Group in Anghami, the companies said in a joint statement on Tuesday.
The combined business will boast $100 million in revenue and bring more than 120 million registered users and 2.5 million paying subscribers on one platform, they said.
“Joining forces with OSN+ is a leap in Anghami’s journey to reinvent entertainment in the Arab World,” said Elie Habib, co-founder of Anghami, who is also set to lead the combined business.
“We’re bringing together technology, music and video to build a comprehensive media ecosystem.”
Streaming services have grown in popularity among the digital-savvy population in the Middle East, which has become an attractive market for entertainment and technology companies over the past decade.
Music streaming services in particular have grown their subscriber base in the past few years, as the cloud-based model enables users to gain access to content on demand, with the option to download tracks for offline listening.
The global music streaming market is projected to hit $103 billion by 2030, growing at a compound annual rate of about 15 per cent from more than $34.5 billion in 2022, according to Research and Markets.
The merger of the region’s two home-grown brands will offer consumers “unprecedented digital aggregation” of premium movies, TV shows, music, podcasts and more, the companies said.
The OSN Group will invest in Anghami at a valuation of $3.65 per share, 3.9 times Anghami’s average stock price for the past month.
The transaction is expected to close in the first quarter of 2024, subject to “customary closing conditions and regulatory approvals”.
After closure of the deal, Anghami intends to maintain the listing of its ordinary shares on the Nasdaq as OSN Group will become a majority shareholder in the company.
The final amount of the OSN Group's cash investment in Anghami and the final number of Anghami securities to be issued in a private placement to OSN is “subject to adjustment based on the terms of the definitive transaction agreement”, the companies said.
In addition to its stake in Anghami, OSN will continue to run its linear TV business OSNtv, which will be led by Joe Kawkabani as group chief executive.
“As two home-grown entities with an unmatched understanding of the local market, we are confident that this new offering will change the face of the regional streaming landscape," Mr Kawkabani said.
In February last year, it became the first technology company from the Arab world to list on New York's Nasdaq exchange.
Over the years, Anghami has broadened its portfolio beyond music streaming. It now provides in-house production, branded music and video content, concerts and live events, a record label for Arab artists, podcasts, a music lounge with live entertainment, and exclusive and original Arabic content.
In August, SRMG Ventures, the venture capital arm of Saudi Research and Media Group, invested $5 million in Anghami to bolster its growth.