Canal+ offers to acquire MultiChoice despite South African restrictions on foreign ownership

February 1, 2024
2 min read
MultiChoice's building
  • Canal+, a French media company, has announced plans to acquire MultiChoice, a South African payTV provider, for R31.7 billion ($1.6 billion).
  • Per the release, the French media company plans to make a non-binding indicative offer of R105 ($5.6) per share, representing a 40% premium over MultiChoice's closing share price of R75 ($4) on January 31, 2024.
  • Canal+ currently owns 31.7% of MultiChoice and has steadily increased its stake over the years despite South African rules limiting foreign ownership of local broadcasters. 

Even if MultiChoice demonstrates readiness, Canal+ may face difficulties with this deal because of the South African Electronic Communication Act 2005. The Act forbids foreigners from directly or indirectly controlling a commercial broadcasting licence or owning more than 20% of a commercial broadcasting licensee's voting shares or paid-up capital. 

However, the statement acknowledged that Canal+ is "respectful and observant" of all laws and regulations applicable to the South African media sector and JSE-listed companies.

Reports indicate that South Africa has proposed to amend the broadcast ownership rules. Per a new draft of the government’s white paper on audio-visual services, there is a proposed increase of 49% in the limit on foreign ownership of commercial South African broadcasters.

Canal+ further said that a partnership between the two companies would establish a significant scale, positioning MultiChoice on a long-term path and enabling it to thrive. 

“It would create a combined group with the ability to commit even greater investment into local content and sport, the provision of a technology platform owned by the combined company, and which would diversify the geographical footprint of MultiChoice, mitigating localised risks and market volatility,” the statement further reads. 

Further, the French media intends to establish an African media business with enhanced scale, positioned to succeed in a competitive global market. It will ensure that "Africa can tell her story to a global audience on her terms" and better serve customers with global content. 

Meanwhile, in March 2023, Comcast, the parent company of NBCUniversal and Sky, acquired a 30% stake in MultiChoice. This move enabled Peacock, NBCUniversal's video streaming service, to power the new Showmax platform

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