Canal+ seals R55bn MultiChoice deal

_End of an era for South Africa’s 30-year-old DStv giant_

> The new combined entity instantly becomes a global content powerhouse, serving more than 40 million subscribers in nearly 70 countries across Africa, Europe, and Asia.

French media giant Canal+ has finally succeeded in its long pursuit of MultiChoice, but only after executing some of the most elaborate compliance manoeuvres South African regulators have ever seen.

The nuptials were agreed on last Friday, when the company’s mandatory offer for all the remaining shares in MultiChoice Group went unconditional, officially sealing a R55-billion deal (R125 per share) that reconfigures the map of African broadcasting.

The new combined entity instantly becomes a global content powerhouse, serving more than 40 million subscribers in nearly 70 countries across Africa, Europe and Asia.

Included in that are 17,000 employees and a portfolio that includes DStv, SuperSport, Showmax, Irdeto and Canal+’s own pay-TV assets — the company is positioning itself as the largest media and entertainment group operating on the continent.

To get there, Canal+ had to jump through hoops that went far beyond writing cheques to shareholders. South Africa’s Electronic Communications Act restricts foreign ownership and control of broadcasting licence-holders.

To satisfy regulators, MultiChoice carved out a new entity, LicenceCo, which will hold all South African broadcasting licences and contracts.

LicenceCo is majority-owned and controlled by historically disadvantaged South Africans, with Phuthuma Nathi and an employee trust as anchors. Canal+ holds only a minority stake, preserving South African sovereignty over the airwaves.

Interestingly, the new top brass told local media during the announcement conference call on Monday that LicenceCo will also be responsible for maintaining the agreements for the news content already on DStv.

Outgoing MultiChoice CEO Calvo Mawela, who is now chair of Canal+ Africa, emphasised the shareholder support behind the arrangement. “Phuthuma Nathi shareholders voted almost 100% to 99%, or so, in favour of the deal,” he said. “This shows the level of support for what we’ve built.”

With LicenceCo in place, Canal+ also won the right to remove restrictive voting provisions in MultiChoice’s constitution that capped foreign influence at 20%.

For the first time, all Canal+ shares count in full at the board level.

Maxime Saada, the Canal+ chairperson, summed it up: “This is how we comply. This was, of course, one of the main areas of discussion with the authorities. In every country where Canal+ operates, we are always the first partner of the local creative industry.”

The finalisation of the deal brought a reshuffle at the top. Saada now chairs the MultiChoice Group board, with Elias Masilela stepping in as lead independent director.

Canal+ veteran David Mignot takes the reins as CEO of Canal+ Africa, headquartered in Johannesburg, while Nicolas Dandoy becomes CFO. Mawela, after steering MultiChoice through years of subscriber losses and escalating content costs, shifts to a more strategic role overseeing African operations.

Mignot pitched the merger as an opportunity to push African content onto the global stage.

“Together, we will harness digital innovation — from streaming and mobile platforms to advanced distribution — to expand access and bring compelling programming to more homes, while giving Africa a stronger voice on the world stage,” said Mignot.

On the press call, no question loomed larger than the fate of SuperSport, the crown jewel of South African broadcasting.

Fans fear a shake-up; regulators fear less access for the public; sports bodies worry about the future of their lucrative contracts.

Saada tried to calm nerves: “SuperSport is an incredible brand. There are no immediate plans to change its packaging.

“With the PSL [Professional Soccer League] and SABC, we want to continue the healthy relationships MultiChoice has built.”

He stressed that there was no territorial overlap in sports rights between the two companies, thanks to their historical split between Francophone and Anglophone Africa. The merger, he said, was “a beautiful puzzle coming together”.

Attention also turned to Showmax, MultiChoice’s streaming reboot built on Comcast technology and boosted by NBCUniversal’s stake. Saada confirmed that a full due diligence was still to come.

“We know what’s public about Showmax, but not the details of the transaction, the economics, the investments. We expect to make a decision in the next few weeks or months,” said Saada.

The bigger play, though, is the development of a single super app combining Showmax, DStv Stream, and Canal+ content.

“Eventually, the vision should be close to the one you described about including all of this content in one super app,” Saada replied to a question exploring the possibility.

It’s a model Canal+ has rolled out in Europe, and one that could radically reshape the user experience across Africa if implemented.

What this means for you
If you’re a shareholder of MultiChoice: you’re getting an exit offer, but you’ll lose control and have exposure to Canal+’s execution risk, though there’s upside from being part of a larger entity.

If you’re a shareholder of Canal+: there’s a chance for growth and higher returns through scale, content leverage, and access to fast-growing African markets—but you need to believe management can deliver operationally and politically.

MultiChoice and Phuthuma Nathi (the black economic empowerment investment vehicle) shareholders will receive an extraordinary dividend of R1.4-billion (US$77-million), with R329-million (US$19) million allocated to Phuthuma Nathi.

*Vivendi eyes global domination*

Behind the deal lies Vivendi, the French conglomerate that owns Canal+. For Vivendi, the MultiChoice acquisition is more than an African play; it’s a cornerstone of its global restructuring.

Vivendi has been in the process of splitting itself into three listed entities, with Canal+ earmarked as its international growth engine. The MultiChoice merger instantly boosts that subscriber base, geographic reach and negotiating power with Hollywood studios and global sports federations.

It also gives the parent company leverage in its long-standing rivalry with Netflix, Amazon Prime Video and Disney+. By consolidating African and European audiences under one umbrella, Vivendi is betting it can position Canal+ as a counterweight to US streaming dominance.

A JSE listing of Canal+ within nine months is on the cards, a move designed to shore up capital and win local market confidence. For South African regulators, it’s also a visible sign that the deal isn’t a one-way extraction of value, but a partnership with local investors.

Saada was bullish about the scale advantages.

“Our combined company is unique, a true global media and entertainment powerhouse, serving more than 40 million subscribers across close to 70 countries. This combination increases our ability to invest in creative and sporting content throughout Europe, Africa and Asia,” said Saada.

For now, Canal+ has pulled off an elegant landing, ticking every regulatory box (details on the BBB-EE side will be released in a future deep dive) while securing the spoils of Africa’s biggest media market. But questions remain.

Can Showmax compete against Netflix’s content machine?

Can SuperSport keep its dominance as global streamers cut into the live sports rights pie?

Will LicenceCo prove transformative or remain a regulatory fig leaf?

Mawela pointed to the stories still waiting to be told: “We think there are many stories in Africa that have not been told, and Maxim is very clear that … we want [those stories] to travel internationally and make sure that people all over the world can get to hear and see them.” _*— DailyMaverick*_