The Competition Tribunal has officially approved the acquisition of MultiChoice, a leading pay-TV operator in South Africa, by the French media giant Groupe Canal+.
In a joint statement released to shareholders on Wednesday, both companies confirmed they are on track to finalise the deal by the previously announced deadlines, with a completion goal before the long-stop date of October 8, 2025.
Canal+ offered to acquire MultiChoice at US$7.14 per share after surpassing the 35% mandatory buyout threshold mandated by South African law. The French company has gradually increased its stake in MultiChoice, culminating in a mandatory offer that values the company at over US$3.1 billion.
The companies needed to secure several regulatory approvals to proceed with the transaction, including those from the Competition Tribunal, JSE, Takeover Regulation Panel, the Independent Communications Authority of South Africa (Icasa), and the Financial Surveillance Department.
The total cost for the French company is expected to exceed R30 billion in cash. While the offer was under consideration, Canal+ continued acquiring MultiChoice shares.
As of May 2024, the Takeover Regulation Panel reported that Canal+ held a 45.2% stake in MultiChoice.
To satisfy regulatory conditions, both companies have made a series of commitments aimed at promoting the public interest. These include supporting firms led by historically disadvantaged individuals (HDPs) and promoting small, micro, and medium-sized enterprises within South Africa’s audiovisual sector. This initiative aims to sustain local entertainment and sports content funding, providing a solid foundation for local content creators to thrive.
Maxime Saada, CEO of Canal+, expressed optimism about the approval from South Africa’s Competition Tribunal, calling it a pivotal milestone in their journey to merge two iconic media entities into a prominent player on the African continent.
Saada highlighted the advantages this transaction presents to South African consumers, businesses in the creative sector, and the nation’s sporting landscape. He emphasised that the combined entity will leverage enhanced scale and greater access to high-growth markets while generating meaningful synergies.
Calvo Mawela, CEO of MultiChoice Group, echoed Saada’s enthusiasm, stating that this agreement signifies a major step forward for both companies and reflects their strategic vision to uplift the communities in which they operate.
Both firms will now begin the necessary procedures to establish the new company structure in compliance with applicable laws, including foreign ownership and control regulations. Under the new structure, MultiChoice (Pty) Ltd (“LicenceCo”) will be spun off and operate as an independent entity, primarily owned and managed by HDPs.
South African regulations restrict Canal+’s voting rights in MultiChoice South Africa to 20%, as the Electronic Communications Act stipulates for broadcasting licensees. Furthermore, the arrangement must adhere to Broad-based Black Economic Empowerment (BBBEE) requirements outlined by Icasa, mandating that licensees be at least 30% owned by historically disadvantaged individuals.
LicenceCo will maintain the operating licenses for South Africa while continuing to serve MultiChoice’s South African subscriber base. The remaining video entertainment assets will stay part of the MultiChoice Group.
The ownership structure of LicenceCo will predominantly consist of historically disadvantaged individuals and groups, including:
- Phuthuma Nathi, which will possess a 27% economic interest
- Two reputable black-owned firms: Identity Partners, Itai Consortium, and Afrifund Consortium
- A Workers’ Trust (Employee Stock Ownership Plan)
MultiChoice and Canal+ acknowledged that experienced leaders lead Identity Partners and Afrifund with extensive commercial and industry expertise.
MultiChoice Group’s stake in LicenceCo will ultimately amount to a 49% economic interest and 20% of voting rights. MultiChoice Group will maintain a 75% direct interest in MultiChoice South Africa, excluding LicenceCo, while Phuthuma Nathi will hold an unchanged 25% interest in MultiChoice South Africa.
LicenceCo will establish several commercial agreements with MultiChoice Group subsidiaries about services currently rendered by other MultiChoice Group entities, covering areas such as content provision, technology, subscriber management, and more.
This strategic move sets the stage for a transformative partnership in Africa’s media and entertainment landscape.
