Dubai: The video-streaming platform OSN+ and Anghami Inc. - the Arabic music portal - are merging to create one of the Middle East's largest entertainment streaming services as they seek to fend off competition from rivals such as Spotify Technology and Netflix.
As part of the deal, OSN+'s parent, OSN Group, will inject $50 million into Anghami and become a majority shareholder in the company. The new entity will have over 120 million registered users, 2.5 million paying subscribers and $100 million in revenue, the companies said in a joint statement.
"We are two local home-grown brands and that is something very important because we are creating something that hasn't been attempted yet in the region," said Elie Habib, one of the two Anghami co-founders, who will take over as CEO of the merged company.
With rising disposable incomes and an increasingly large, young digital-savvy population, the Middle East is an attractive market for entertainment and technology companies. Regional firms such as OSN and Abu Dhabi-based Starzplay are vying for local audiences along with larger international rivals such as Disney+ and Netflix.
"We definitely are now in a very small league of a few players that are of this scale and that was a big reason for doing the deal," said OSN CEO Joe Kawkabani.
$ 100 m
The revenue of the combined OSN+-Anghami entitySaudi funding
The deal is expected to close early next year subject to regulatory and anti-trust approvals. OSN Group, which is majority owned by a Kuwaiti conglomerate, will continue to run its pay TV business separately.
Anghami was founded by two Lebanese entrepreneurs in 2012 and quickly emerged as the region's pre-eminent local rival to Spotify and Deezer SA. Now based in Abu Dhabi, it attracted $5 million in funding from a Saudi media company earlier this year.
Anghami has a catalog of over 100 million songs and podcasts, while OSN+ has over 18,000 hours of content and exclusive partnership deals with HBO, NBC Universal, Paramount, and leading Arab and Turkish studios. The merged company will allow customers to listen to music and watch a movie via the same app.
"You combine the power of that content with the power of the technology, with the scale that the two companies create together," said Kawkabani. "We have a pretty unique proposition and I think we have all the ingredients to succeed and fight very well" against international competitors, he said.
Anghami, which went public 18 months ago via a SPAC merger at an enterprise value of $220 million, will continue to be listed on the Nasdaq. Its share price has since fallen since to $1.58, giving it a market value of about $41 million. OSN's cash injection will help the stock from being delisted, Elie said.
The OSN Group is investing in Anghami at a valuation of $3.65 per share, or 3.9 times the stock's average price for the past month, OSN said.
In 2020, Anghami was considering a deal with OSN, Bloomberg reported at the time.
