MultiChoice Group has agreed to work closely with Canal+ to facilitate a mandatory offer that, if successful, will see the French broadcasting giant buying out the South African broadcaster.
According to a joint statement released by the two companies, both see the merger as a strategic move that will “build a global entertainment leader with Africa at its heart”. Even with both companies singing from the same hymn sheet, getting the deal across the line could still prove difficult.
“A combined group would be better positioned to address key structural challenges and opportunities resulting from the progressive digitalisation and globalisation of the media and entertainment sector,” MultiChoice and Canal+ said.
Canal+ believes it can provide MultiChoice the scale it needs to fend off the challenge posed by its US rivals. Many view Africa as the next frontier in global broadcasting. According to the United Nations, as internet adoption rates rise in tandem with living standards across the continent, the race is on to capture market share among a population expected to reach 1.6 billion by 2030.
In the joint statement, Canal+ said competition for the burgeoning African market comes from large multinationals such as Netflix, Google’s YouTube and Walt Disney Co’s Disney+. Canal+ believes it can provide MultiChoice the scale it needs to fend off the challenge posed by its US rivals, which would complement the South African broadcaster’s longstanding boots-on-the-ground advantage across Africa.
The scale Canal+ offers to MultiChoice is significant. As of December 2023, Groupe Canal+ reported revenues of US$7.1 billion with a customer base of 26.4 million people, 17 million of whom are outside its home country of France.
However, the added scale would empower MultiChoice to make bolder moves and increase its distribution profile. MultiChoice has a strong content creation business focusing on localised content. Joining forces with Canal+ would expose the South African broadcaster to markets across Europe, Africa, and Asia.
“MultiChoice would benefit from the combined group’s scale across its entire footprint,” the two companies said. “This could have significant benefits for the African creative and sports ecosystems, for example, by enabling high-quality content created on the continent to be distributed to an international audience.”
Growth in distribution channels for MultiChoice would be accompanied by the availability of skills across the Canal+ ecosystem, which range from content creation to marketing and technical platform-centric competencies.
However compelling the rationale for joining forces may be, questions about how the two companies plan to overcome several regulatory hurdles still need to be answered. The two major stumbling blocks are broad-based black economic empowerment regulations and rules around the foreign ownership of broadcasting entities.
