Canal+–MultiChoice Merger Gets Green Light Amid Minimal Competition Concerns

The planned takeover of MultiChoice by French media giant Canal+ has cleared a key hurdle, with South Africa’s Competition Tribunal confirming the merger raises minimal competition concerns.

At a hearing on Thursday, the Competition Commission told the Tribunal that while overlaps exist between the two broadcasters, both horizontally and vertically, they are not significant enough to pose anti-competitive risks.

Minimal Market Overlap

The Commission noted that both companies supply video content for broadcasting, with MultiChoice operating major platforms like SuperSport and M-Net. Canal+, meanwhile, contributes only a small number of channels, fewer than three on the DStv platform, making the horizontal overlap “very small.”

Vertically, Canal+ currently supplies some content to MultiChoice and its affiliate Havas Media purchases advertising from MultiChoice’s sales house, Digital Media Sales (DMS). But regulators said the impact of these relationships on market competition is negligible.

“We looked at this merger from a worst-case scenario to ensure all concerns were fully examined,” said Ndivhuwo Moleya, senior mergers analyst at the Competition Commission. “But the overlaps, both in content and advertising are very limited.”

Restructuring Required

The merger still hinges on a major structural change. MultiChoice’s broadcasting licence will be ring-fenced into a new standalone company, LicenseCo, to comply with South Africa’s ownership and regulatory requirements.

LicenseCo will be majority-owned by black economic empowerment (BEE) partners, with MultiChoice holding a minority 49% stake. Among the key players involved are Phuthuma Nathi (expected to hold 27%), Identity Partners’ Itai Consortium, and Afrifund Consortium, bringing prominent black business leaders like Sipho Maseko and Sonja De Bruyn into the mix.

The Tribunal confirmed that the merged Canal+ and MultiChoice group will have no control or interest in LicenseCo once the deal closes. Specifics of the carve-out remain confidential.

Industry Impact

MultiChoice has been battling subscriber losses on its DStv platform and ramping up digital investments in Showmax. Canal+ CEO Maxime Saada has described the merger as a chance to build a powerful pan-African media group.

“This seems a clever way to get around foreign ownership rules, assuming they’ve had at least informal approval from ICASA,” said analyst Simon Brown.

With the Tribunal’s findings out, the deal is now closer to completion, pending final regulatory sign-offs and implementation of the LicenseCo structure.

{Source: IOL}

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