MultiChoice Group and French media giant Canal+ have announced plans for restructuring the South African pay-TV operator, paving the way for Canal+ to acquire the remaining shares of MultiChoice it does not already own. This follows Canal+ triggering South Africa's mandatory offer threshold of 35% ownership, having steadily increased its stake since October 2020. Now, with Canal+ offering R125 per share—valuing the company at over R55 billion—the companies are taking definitive steps to comply with local broadcasting regulations.
The recent notice to shareholders outlines significant changes to MultiChoice's corporate structure, which will see MultiChoice South Africa carved out as its independent entity, known as MultiChoice (Pty) Ltd or LicenceCo. “This transaction is an opportunity to create a unique global media company with strong presence across Africa,” said Maxime Saada, CEO of Canal+, emphasizing the scale and expertise necessary to compete with major players within the media sector.
One of the standout features of the envisioned post-acquisition scenario is LicenceCo. This restructured entity will hold the subscription broadcasting licenses required to operate within South Africa and will directly contract with local subscribers. A majority of LicenceCo will be owned by historically disadvantaged persons (HDPs), aligning the move with South African Broad-Based Black Economic Empowerment (BBBEE) policies. Notable to this ownership structure is Phuthuma Nathi, which will hold 27% economic interest, alongside two well-regarded black-owned firms: the Identity Partners Itai Consortium and Afrifund Consortium. A Workers' Trust will also enable employee participation within LicenceCo.
MultiChoice Group will retain 49% economic interest and 20% voting rights within LicenceCo, allowing it to manage compliance with foreign ownership limitations set forth by the Electronic Communications Act. These statutes prohibit foreign entities from holding more than 20% voting rights within local broadcasting licensees. The need for compliance stems from concerns surrounding foreign control over local media entities, leading to regulatory scrutiny and the necessity for strategic restructuring.
Calvo Mawela, CEO of MultiChoice Group, expressed his contentment with the transaction’s progress, highlighting the ambition to bolster their subscriber offering: “The opportunity to combine our efforts to increase scale and provide our subscribers with even more competitive services excites us.” The multi-pronged approach aimed at ensuring no disruptions for viewers and sustaining service continuity is seen as central to maintaining customer loyalty amid competitive industry dynamics.
The companies also communicated confidence concerning the transaction's alignment with local laws, emphasizing engagements with the Independent Board of Phuthuma Nathi, which has already shown support for the proposed shifts. This independent board will work to assess formal proposals, ensuring all operations proceed through proper regulatory channels.
Further regulatory approvals are necessary for the transaction to go through, including assessments from the Financial Surveillance Department, Competition Tribunal, and the Independent Communications Authority of South Africa (Icasa). The South African Competition Commission is currently reviewing the LicenceCo structure, following details submitted earlier this year.
For Canal+ and MultiChoice, the merger carries aspirations to not merely solidify their presence but to thrive within Africa's burgeoning media market. Saada's remarks reflect this vision: “We remain committed to delivering on our ambition to unite MultiChoice and Canal+, representing another step forward. Our objective is to build something enormous and rich with possibilities.” Mawela echoed this sentiment, illustrating the transformation's significance: “MultiChoice has long created value for Phuthuma Nathi's shareholders, and this ambitious endeavor broadens our BBBEE participation—reinvigorated through new partnerships and enhanced opportunities for employees.”
This newly proposed structure encapsulates the remarkable dynamics of the South African media industry. With foreign investment becoming increasingly important yet tightly regulated, Canal+ and MultiChoice aim to strike the right balance between competing globally and adhering to local laws. If all goes as planned, the acquisition marks not merely a merger of companies but the formation of a formidable player within Africa’s growing digital content ecosystem.
Overall, the proposed restructuring by MultiChoice Group and Canal+ moves closer to redefining Africa’s pay-TV industry, with significant steps toward regulatory compliance and the fusion of international expertise with local empowerment. The team's confidence points toward the transformative potential of this agreement, one where viewers and stakeholders alike may soon reap the benefits of a more integrated and competitive media service offering.