South Africa Grants Approval for Canal+ MultiChoice Agreement - Under Stipulations
In a potential game-changer for Africa's media landscape, French media giant Canal+ is one step closer to fully acquiring the South African pay-TV broadcaster MultiChoice. The acquisition, valued at around R55 billion ($3 billion), is subject to certain public interest conditions as recommended by the Competition Commission of South Africa.
The Competition Tribunal is set to issue a final ruling on the approval of Canal+'s takeover of MultiChoice, which is owned by Vivendi, the entity seeking the acquisition. Last year, Canal+ offered R125 ($6.97) per share for MultiChoice, a deal worth about R35 billion ($1.96 billion).
If approved, the takeover will fully acquire MultiChoice. However, the deal comes with specific public interest conditions. These conditions aim to protect employment, promote local content, support Black-owned suppliers, and ensure local ownership and empowerment.
Employment protection is a key aspect of the agreement. Canal+, MultiChoice Group, and MultiChoice (LicenceCo) must not retrench any employees in South Africa as a result of the merger for three years from the merger implementation date. They must also ensure no adverse effects on employees' terms and conditions of employment due to the merger.
The merged entity must commit to significant expenditure on local content creation, supporting South African general entertainment and sports content. This is intended to create opportunities for local content creators and promote the development of South African media production.
Measures also require the merged company to support Black-owned suppliers, thus advancing local economic empowerment consistent with South Africa’s policies. The structure involves carving out LicenceCo, the subsidiary holding the South African broadcasting license. LicenceCo will remain majority-owned by historically disadvantaged persons (HDPs), including local consortia and a Workers’ Trust. MultiChoice Group retains a minority economic interest (49%) and voting rights (20%) in LicenceCo, ensuring ongoing local participation and control.
The new entity must ensure South African operations remain central to its future business strategy, reflecting its ongoing commitment to the South African market and economy. The implementation of these conditions will be subject to strict reporting and monitoring mechanisms to ensure enforceability and compliance.
These public interest conditions were agreed upon and enhanced by the Competition Tribunal to ensure the merger benefits not just shareholders but also the broader South African economy and society. The final approval for the takeover is still pending, awaiting the final decision from the Competition Tribunal. If approved, the acquisition could reshape Africa's media landscape significantly.
- The final decision on the approval of Canal+'s takeover of MultiChoice by the Competition Tribunal is still pending, and if approved, the acquisition could lead to substantial changes in Africa's business and finance landscape, particularly in the media sector.
- The merged entity, if approved, will be subject to public interest conditions that aim to promote local content, support Black-owned suppliers, protect employment, and ensure local ownership and empowerment in South Africa's business and finance sectors, reflecting a commitment to the South African economy and society.
