Competition Tribunal greenlights CANAL+ R35bn acquisition of MultiChoice

The Competition Tribunal of South Africa has approved the R35 billion acquisition of the MultiChoice Group (MCG) by French media giant CANAL+. effectively consolidating two of Africa's biggest television and media groups.

This landmark deal, designed not only to strengthen CANAL+’s foothold in sub-Saharan Africa but also to foster competition against dominant global streaming services like Netflix, comes with a series of stipulations aimed at promoting local empowerment in the audio-visual industry.

CANAL+, recently spun off from parent company Vivendi, made an offer to MultiChoice shareholders at R125 per share—valuing the total acquisition at R55bn. The Competition Commission previously indicated that the merger would not impede competition within any market.

Historically, CANAL+ has focused on francophone African territories, while MultiChoice has predominantly catered to the sub-saharan demographic. The approval marks a significant step towards further convergence in the African media landscape, transforming the combined entity into a powerhouse capable of taking on increased global competition.

MultiChoice’s share price experienced a slight uptick following the Tribunal's announcement, rising 2.19% to R120 on the JSE. This reflects a positive sentiment from shareholders regarding the future of the company post-acquisition.

The Tribunal's endorsement is contingent on a package of public interest commitments from the merging parties, indicative of a commitment to support historically disadvantaged persons (HDPs) and small, micro and medium enterprises (SMMEs) operating in South Africa’s audio-visual industry. "The package supports the participation of firms controlled by historically disadvantaged persons (HDPs)," the parties asserted in a joint statement.

Moreover, the arrangement will ensure that funding for local sports and entertainment content continues. Significantly, the deal stipulates that there will be no negative impact on DStv subscribers in the immediate term, with assurances around employment also being a key focus; CANAL+ has committed to maintaining employment levels through a three-year moratorium on any merger-specific layoffs.

Other specifics of the deal require CANAL+ to pursue a secondary listing on the JSE—having been listed in London so far—as well as fostering plurality in television news, enhancing access to international sporting events, and promoting export opportunities for South African content.

Maxime Saada, CEO of CANAL+, viewed the Tribunal's approval as the final hurdle in South Africa's competition review process.

"This is a hugely positive step forward in our journey to bring together two iconic media and entertainment companies and create a true champion for Africa,” noted Saada, expressing enthusiasm for the transaction’s potential for consumers and the creative economy alike.

Calvo Mawela, CEO of MultiChoice stated: “This announcement reflects the strength of our strategic vision and our ongoing commitment to continue uplifting the communities where we operate.” Mawela further emphasised an eagerness to embark on this new chapter, promising to build a global media and entertainment landscape rooted in African culture.

As both enterprises move towards completing the mandatory offer by the timeline established earlier this year, observers eagerly anticipate the opportunities that this significant merger will unlock for the media and entertainment sector in South Africa and beyond.

BUSINESS REPORT