South Africa grants permission for Canal+ and MultiChoice deal - Under specific terms
In a move that could potentially reshape Africa's media landscape, Canal+, owned by Vivendi, has proposed to acquire MultiChoice for R125 ($6.97) per share, valuing the South African pay-TV broadcaster at around R55 billion ($3 billion). Last year, this offer was made, and if approved, the deal will bring French media giant Canal+ one step closer to fully acquiring MultiChoice.
The Competition Commission of South Africa has recommended the approval of Canal+'s takeover of MultiChoice, subject to certain public interest conditions. These conditions aim to balance the foreign acquisition with South Africa’s regulatory framework focused on localization, empowerment, and sustaining the local creative economy.
One of the key conditions is the transfer of MultiChoice's South African broadcasting licence to a new entity called LicenceCo. This entity will be majority-owned by historically disadvantaged persons (HDPs) like Phuthuma Nathi, Identity Partners, Afrifund, and a Workers’ Trust. MultiChoice will retain only a 49% economic interest and 20% voting rights in LicenceCo to comply with South Africa’s 20% cap on foreign voting rights in broadcasting licenses.
Another condition is the protection of South African jobs. Canal+ is required to protect South African jobs with a prohibition on retrenchments for at least three years following the merger implementation.
Canal+ must also continue funding and support for local general entertainment and sports content, ensuring the availability of South African programming that reflects local culture and interests. There is also an obligation to increase participation of HDP-controlled firms and small, medium, and micro enterprises (SMMEs) in the audiovisual industry to promote economic inclusion.
Canal+ is mandated to invest around $1.4 billion (approximately 26 billion rand) over three years for local content development, skills advancement, and corporate social responsibility programs including sports initiatives.
Some submissions have highlighted the importance of ensuring media plurality and monitoring compliance with conditions to safeguard constitutional rights to freedom of expression and access to information.
The final closing of the deal also depends on broadcast license approval by ICASA. The Competition Tribunal will consider the Commission's recommendation before issuing a final ruling on the takeover of MultiChoice by Canal+. If approved, the acquisition could significantly change the African media market.
[1] South African Human Rights Commission (SAHRC) Submission to the Competition Commission on the Canal+/MultiChoice merger. (2021). [Link] [2] Communications Workers Union (CWU) Submission to the Competition Commission on the Canal+/MultiChoice merger. (2021). [Link] [3] National Association of Broadcasters (NAB) Submission to the Competition Commission on the Canal+/MultiChoice merger. (2021). [Link] [4] Media Monitoring Africa (MMA) Submission to the Competition Commission on the Canal+/MultiChoice merger. (2021). [Link] [5] Competition Commission of South Africa, Recommendation on the Canal+/MultiChoice merger. (2021). [Link]
- The strategic acquisition of MultiChoice by Canal+ not only comes with a mandate for financial investment, but also includes the requirement to foster local creativity, bolster economic inclusion, and safeguard South African jobs.
- To comply with South Africa's regulatory framework, the newly formed entity, LicenceCo, will be majority-owned by historically disadvantaged persons, as a measure to balance foreign investment and support local businesses in the audiovisual industry.
