- Canal+ plans to restructure MultiChoice by creating two independent entities: LicenceCo, which will hold the broadcasting licence, and the remaining part, MultiChoice Group.
- LicenceCo will be majority-owned by historically disadvantaged persons, including Phuthuma Nathi, Identity Partners Itai Consortium, Afrifund Consortium, and a Workers' Trust.
- MultiChoice Group will retain a 49% economic interest and 20% voting rights in LicenceCo.
- This restructuring aims to comply with South African regulations on foreign ownership and maintain Broad-Based Black Economic Empowerment (BBBEE) credentials.
The decision comes as the French media conglomerate Canal+ advances its acquisition of MultiChoice. To adhere to South African laws that limit foreign ownership in broadcasting, the restructuring will see LicenceCo majority-owned by historically disadvantaged persons (HDPs). Per Teeveetee’s blog, the ownership structure is outlined as follows:
- Phuthuma Nathi: A Broad-Based Black Economic Empowerment (BBBEE) scheme, will hold a 27% economic interest in LicenceCo.
- Identity Partners Itai Consortium and Afrifund Consortium: Two black-owned and managed companies, will also hold significant stakes.
- Workers' Trust (ESOP): Established to benefit employees, further promoting inclusive ownership.
MultiChoice Group will maintain a 49% economic interest in LicenceCo, with 20% of the voting rights. The remainder of the group's video entertainment assets will continue under the MultiChoice Group umbrella.
This restructuring is designed to ensure compliance with the Electronic Communications Act, which restricts foreign control of broadcasting licences. By creating LicenceCo, Canal+ aims to satisfy regulatory requirements while preserving its Broad-Based Black Economic Empowerment (BBBEE) credentials.
For subscribers, the transition is expected to be seamless. LicenceCo will enter into various commercial agreements with MultiChoice Group subsidiaries to ensure continued service delivery.
While this move ensures regulatory compliance, it also presents opportunities for new investors to participate in the South African media landscape. The inclusion of BBBEE-focused investors aligns with the country's broader economic transformation agenda, fostering a more inclusive and diversified media industry.
Canal+, which has gradually increased its stake in MultiChoice over the years, continues its bid to consolidate its position in Africa’s broadcasting market. The outcome of this restructuring could set a precedent for other multinational acquisitions in highly regulated markets.
As the regulatory approval process continues, industry stakeholders will be watching closely to see how this restructuring impacts MultiChoice’s long-term strategy and the broader African media ecosystem.
