Multichoice readies for R55 billion takeover – what it means for customers

 ·4 Feb 2025

Multichoice and Canal+ have laid out the intended post-transaction structure of Multichoice should the French broadcasting giant’s takeover deal go through.

Canal+ has made an offer to buy the remaining shares in the company, which it does not already own, for roughly R55 billion.

The groups have also engaged with the Board of Directors of Phuthuma Nathi, which has
given in-principle support for the transaction.

Phuthuma Nathi is an economic empowerment (BBBEE) share scheme, with over 70,000 shareholders.

Multichoice said that the Independent Board of Phuthuma Nathi will be constituted to review and consider the necessary formal proposals by the relevant regulations.

A key feature of the intended post-transaction structure is that the Multichoice Group will be restructured.

The broadcasting licence in South Africa and the entity which contracts with South African subscribers,
Multichoice (Pty) Ltd (Licence Co), will be taken out of the group and will become an independent entity

The remainder of the group’s video entertainment assets will remain part of the Multichoice Group.

LicenceCo will also continue to hold the subscription broadcasting licence in South Africa and will
continue to contract with Multichoice’s South African subscribers.

LicenceCo will be majority-owned by Historically Disadvantaged Persons (HDPs), which includes the following:

  • Phuthuma Nathi, which will ultimately hold a 27% economic interest in LicenceCo;
  • two well-established black-owned and managed companies, Identity Partners Itai Consortium and Afrifund Consortium, and
  • a Workers’ Trust (ESOP).

The Multichoice Group’s shareholding in LicenceCo will give it a 49% economic interest as well as a 20% share of the voting rights.

Multichoice Group will continue to retain its existing 75% direct interest in Multichoice South Africa,
which will exclude LicenceCo. The remaining 25% interest will remain with Phuthuma Nathi.

“LicenceCo will enter into various commercial agreements with Multichoice Group subsidiaries about the services currently provided to LicenceCo by other Multichoice Group entities,” said the group.

“These relate to, among other things, the provision of content, technology, subscriber management and support and other functions.”

The transaction will not result in any disruption for LicenceCo’s South African viewers, who will
continue to access its services as normal.

“In time those subscribers will benefit from the additional content and technology investments envisaged by the Multichoice Group, in its capacity as a supplier to LicenceCo.”

“Canal+ and Multichoice are confident that the envisaged structure meets the requirements of all applicable laws, including the restrictions on foreign ownership and control of broadcasting licences contained in the Electronic Communications Act, 2005.”

The LicenceCo structure was submitted to the South African Competition Commission as part of the filings made on 30 September 2024 and is being considered by the Commission.

The group said that it will be finalised in due course along with along with the attendant shareholder transactions and upon receiving the necessary approval of the relevant authorities.

It remains subject to regulatory review across several jurisdictions, such as South Africa.

It will also be assessed by the Independent Board of Phuthuma Nathi, following the in-principle support given by the Phuthuma Nathi Board to the proposed transaction.

“This transaction is an opportunity to create a unique global media company, with a strong presence across Africa, with the scale, expertise and creativity to compete and partner with the largest players within the media sector and beyond,” said Maxime Saada, CEO of Canal+.

“I am confident that the contemplated post-transaction structure will comply with South Africa’s
laws and regulations.”

“We are very pleased about the progress that has been made to this transaction,” added Calvo Mawela, CEO of Multichoice Group.

“In a fast-evolving industry that is becoming increasingly competitive, the opportunity to combine our efforts to increase scale and bring our subscribers an even better offering is something that continues to excite us.”

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