Green Light for Canal+ and MultiChoice Merger, But With Major Conditions

French media group Canal+ has moved a step closer to taking full control of MultiChoice, the owner of DStv, after South Africa’s Competition Commission gave the proposed R55 billion deal a thumbs-up—albeit with significant conditions attached.

The Commission, which assessed the merger after notification was filed in late September 2024, found that the deal is unlikely to harm competition in the broadcasting sector. However, given MultiChoice’s central role in South Africa’s media landscape, regulators have insisted on strong public interest safeguards.

Canal+, which already owns about 45% of MultiChoice shares, has offered R125 per share for the rest—valuing the company at R55 billion. This deal now heads to the Competition Tribunal for a final decision.

Transformation, Jobs and Local Content Take Centre Stage

To address national concerns, the merger comes with a slate of commitments, including transformation, job security, and support for local industries.

One of the biggest wins for South Africans is a three-year moratorium on retrenchments. Both Canal+ and MultiChoice have agreed that no job cuts will happen during this period, offering reassurance to workers and unions alike.

A new company, LicenceCo, will be created to hold broadcasting licences and manage local subscriptions. Importantly, this company will be majority-owned by historically disadvantaged persons (HDPs) and workers. This ensures compliance with South African regulations that restrict foreign control of broadcasters.

In total, public interest investments stemming from the merger are projected to reach R26 billion over the next three years. These will cover everything from local content creation to small business procurement and export promotion of South African shows.

Headquartered at Home, with an Eye on Growth

Despite the French backing, Canal+ has committed that MultiChoice will remain incorporated and headquartered in South Africa. The group also plans a secondary inward listing on the JSE, a move expected to bolster investor confidence and support economic growth.

The merger parties have also pledged continued investment in corporate social initiatives, such as skills development in the audiovisual sector and grassroots sports support.

In a boost for news diversity, LicenceCo will continue sourcing and airing local news content, preserving a plurality of voices on DStv’s platforms.

Regulatory Hurdles Remain

While the Competition Commission’s support is a significant milestone, the journey isn’t over yet. The deal still needs to pass through several other regulatory checkpoints, including approvals from the JSE, Financial Surveillance Department, ICASA, and the Takeover Regulation Panel.

A major hurdle lies in South Africa’s strict broadcasting ownership laws. These prevent foreign entities from holding more than 20% voting rights in broadcasting licensees and limit board participation. The proposed structure of LicenceCo—where the merged group will hold only 49% ownership and 20% voting rights—is designed to navigate these legal constraints.

No Disruption for Viewers

Despite the complex process unfolding in the background, MultiChoice has assured its millions of DStv subscribers that service will remain uninterrupted. If all goes according to plan, South Africa could soon see a re-energized broadcasting powerhouse with global backing and local roots.

{Source: BusinessTech}

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