MultiChoice Group and its French suitor, Groupe Canal+, have approached South African regulators, including the communications regulator, Icasa, seeking to have their proposed merger consummated.
Canal+ has offered to pay MultiChoice shareholders US$7.20/share in cash.
In a statement to investors, the companies said they “made a joint merger control filing pertaining to the offer to the Competition Commission as required by the Competition Act”.
“Canal+ and MultiChoice are also engaging with the Independent Communications Authority of South Africa and other regulatory authorities.”
They said that in terms of the Competition Act, the transaction is classified as a “large merger”, which requires approval by the Competition Tribunal. “Accordingly, the Competition Commission will consider the filing and refer its recommendations to the tribunal,” the statement said.
“Given the regulatory processes underway, Canal+ and MultiChoice will provide MultiChoice shareholders with further updates and details in due course.”
The merging parties are likely to encounter stiff resistance to their plans from both the competition regulators and Icasa. The latter must decide whether the foreign ownership restrictions in the Electronic Communications Act warrant blocking the deal.
There’s still no detailed clarity on exactly how they intend to navigate the restriction, which prohibits foreign entities from holding more than 20% of the voting rights of a South African broadcaster.
This restriction in the ECA may be the biggest obstacle to consummating the deal between the two companies.
The parties said they would work to navigate the ECA restriction in June.
