South Africa Grants Approval for Canal+ and MultiChoice Merger, Subject to Certain Terms
The Competition Commission of South Africa has recommended the approval of Canal+'s takeover of MultiChoice, a significant move in the media industry that could reshape Africa's media landscape. The acquisition, if approved, would bring French media giant Canal+ one step closer to fully acquiring the South African pay-TV broadcaster MultiChoice.
Last year, Canal+ offered R125 ($6.97) per share for MultiChoice, which amounts to a deal worth about R35 billion ($1.96 billion). However, the acquisition still requires final clearance from the Competition Tribunal.
The deal values MultiChoice at around R55 billion ($3 billion), and if approved, it will mark a significant move in the media industry, given MultiChoice's dominance in the South African pay-TV market. Canal+ has been gradually increasing its stake in MultiChoice over the years, indicating a long-term strategy to expand its presence in Africa's media and streaming market.
The Commission has set specific public interest conditions for the acquisition. These conditions aim to ensure that the transaction benefits South African society broadly, including economic empowerment and cultural representation, while adhering to local ownership laws governing broadcasting licenses.
The public interest conditions include a $1.4 billion (26 billion rand) commitment over three years to support local content production, skills development, and corporate social responsibility initiatives, including sports development. To comply with South African regulations limiting foreign ownership in broadcasting licenses to 20%, MultiChoice must carve out its domestic unit into a new entity called LicenceCo, which will be majority-owned by Historically Disadvantaged Persons (HDPs) and workers.
Additionally, the parties have committed to no retrenchments of workers for three years following the acquisition. There is also a commitment to increased participation of HDP-controlled firms and small businesses within the South African audiovisual industry. The conditions also promote local content development, protect existing jobs, support Black-owned suppliers, and ensure South African operations remain central to the new entity’s future.
The final ruling on the acquisition by the Competition Tribunal is pending. The Commission's recommendation will be considered by the Competition Tribunal before issuing a final ruling on the approval of Canal+'s takeover of MultiChoice. If the public interest conditions are met, the acquisition of MultiChoice by Canal+ will be allowed to proceed.
[1] Competition Commission of South Africa: Recommendation of Approval for Canal+'s Takeover of MultiChoice [2] Business Live: Canal+ to Acquire MultiChoice: What You Need to Know [3] Fin24: Canal+ Offers R125 per Share for MultiChoice [4] Moneyweb: South Africa's Competition Commission Sets Conditions for Canal+'s Acquisition of MultiChoice
- The acquisition of MultiChoice by Canal+, if approved, could have a significant impact on both the local finance sector and the broader business landscape in South Africa, given the deal's value and the implications it may have for the media industry.
- The public interest conditions set by the Competition Commission of South Africa for the acquisition of MultiChoice by Canal+ include a substantial commitment towards local content production, skills development, and corporate social responsibility initiatives, indicating a focus on economic empowerment and cultural representation within the finance and business sectors.
