South African Regulator Grants Conditional Approval to Canal+'s $2.9 Billion Acquisition of MultiChoice

South Africa's Competition Commission has conditionally approved French media conglomerate Canal+'s proposed acquisition of MultiChoice Group, a leading pay-TV broadcaster in Africa. The deal, valued at approximately R55 billion ($2.9 billion), involves Canal+ acquiring the remaining shares of MultiChoice at R125 per share, a 67% premium over its pre-offer price. Canal+ currently holds a 45.2% stake in MultiChoice.

Key Conditions for Approval

The Commission's recommendation includes several public interest conditions to address concerns about employment, ownership, and local content:

• Employment Protection: No retrenchments for three years post-merger.
• Ownership by Historically Disadvantaged Persons (HDPs): Majority ownership of the South African broadcasting licensee, to be held by a new entity named LicenceCo, will be allocated to HDPs and workers.
• Local Content Investment: Commitments to invest in South African general entertainment and sports content, promoting local audiovisual content in new markets.
• Supplier Development: Procurement from HDPs and small, medium, and micro enterprises (SMMEs).
• Corporate Social Responsibility: Continued support for skills development, sports, and other initiatives.

The total value of these public interest commitments is projected to be about R26 billion over the next three years.

Regulatory Compliance

To comply with South Africa's Electronic Communications Act, which limits foreign ownership of broadcasting licenses to 20%, a new entity, LicenceCo, will be established to hold MultiChoice's South African broadcasting license. LicenceCo will be majority-owned by HDPs and workers, ensuring compliance with local ownership laws.

Next Steps

The merger still requires final approval from the Competition Tribunal and other regulatory bodies. Both Canal+ and MultiChoice aim to complete the transaction by the extended deadline of October 8, 2025.

Market Reaction

Following the announcement, MultiChoice's shares rose by approximately 5.33%, reflecting investor optimism about the merger's potential benefits.