MultiChoice & Canal+ Deal: What’s Going On
Background
- Canal+, the French media giant, is in the process of acquiring MultiChoice Group in a deal valued at roughly R55-billion (about US$3-3.2 billion).
- As part of that, in July 2025 the South African Competition Tribunal conditionally approved Canal+’s takeover offer.
The approval is conditional because there are various regulatory, ownership and empowerment (BEE/HDP) requirements that need to be met.
What Restructuring Means
To satisfy South African laws (especially around foreign ownership of broadcaster licences and Broad-Based Black Economic Empowerment [B-BBEE] / Historically Disadvantaged Persons [HDP] participation), the companies are reorganising:
- LicenceCo carve-out
- MultiChoice will carve out its South African broadcasting licence‐holding unit. This new entity—often called LicenceCo—will contract with local (South African) subscribers and hold the broadcasting licence.
- The rest of the video entertainment assets (outside SA domestic licensed broadcasting) stay within the main MultiChoice Group.
- Ownership & voting rights restructuring
- MultiChoice is reducing its voting rights in LicenceCo to 20%, while retaining a 49% economic interest.
- The majority of the control (economic and/or voting influence) in LicenceCo will be held by entities meeting HDP / B-BBEE criteria:
- Phuthuma Nathi (a long-standing black empowerment vehicle) will hold a meaningful stake.
- Other new or restructured shareholders include Identity Partners Itai Consortium (IPIC), Afrifund Consortium, 13th Avenue Investments, and a Workers’ Trust. These are structured either via ordinary shares, or via notional vendor-funded shares that convert over time.
- Extraordinary Dividend and related financial movements
- There will be an extraordinary dividend declared by LicenceCo / the relevant units worth about R1.375-billion, with Phuthuma Nathi getting a slice (≈ R343.75 million) of it.
- Also, as part of the equity reallocation, Phuthuma Nathi will claim a loan (about R3.77 billion) from MultiChoice, to partly fund their ownership stake.
The Rules They Must Comply With
- Foreign ownership & voting restrictions: Under South African law (especially the Electronic Communications Act), foreign entities cannot have more than 20% voting rights in entities holding a South African broadcasting licence.
- HDP / B-BBEE thresholds: There are requirements that broadcasting licensees must be at least 30% owned by historically disadvantaged persons (which include black South Africans, women, persons with disabilities).
- Public interest commitments: To get regulatory approval, MultiChoice & Canal+ committed to things like:
• Maintaining SA content (entertainment, sports) funding;
• Protecting jobs / no retrenchments for a certain period;
• Supporting small, medium, micro enterprises (SMMEs) and HDP participants in audiovisual supply chain.
Key Milestones & Current Status
- Phuthuma Nathi shareholder approval: Phuthuma Nathi’s shareholders approved the restructuring plan on 26 August 2025.
- Implementation started: As of mid-September 2025 (roughly 16-17 September), MultiChoice has confirmed that all required agreements for the reorganisation have become unconditional. That means the restructuring (LicenceCo creation, share-transfers, etc.) is now active.
- Timetable / mandatory offer: Once reorganisation is completed, an updated timetable for Canal+’s mandatory offer for all remaining shares will be released. Before, the long-stop date for completing the offer is 8 October 2025.
Implications & Industry Reactions
- For MultiChoice: This injects new capital and potential stability. The company has been under pressure: shrinking subscriber numbers for its linear (traditional) pay-TV business, currency pressures, etc. The deal lets them lean on Canal+ for scale, investment.
- For HDP / empowerment shareholders: Major beneficiaries in this setup. Phuthuma Nathi increases its role; workers get ownership via the Workers Trust. It boosts inclusion in ownership and control.
- Potential concerns:
- Whether the carved-out structure (LicenceCo + rest of group) will maintain content quality, service continuity.
- How foreign content & influence will be balanced given the legal caps.
- The timeline is tight: some concerns about legislative changes vs. timing for full compliance.
- Regulatory satisfaction: Authorities required these steps before giving conditional approval. The fact that the process is moving forward cleanly suggests Canal+ and MultiChoice are meeting their commitments so far. (ITWeb)
Key Figures & Numbers
| Metric | Value |
|---|---|
| Valuation of takeover offer | ~ R55 billion (~US$3.1-3.2 billion) |
| Share price offered by Canal+ | R125 per share for remaining shares not already owned. |
| Economic interest vs voting rights (MultiChoice in LicenceCo) | 49% economic interest, 20% voting rights. |
| Extraordinary dividend declared | R1.375 billion (with ~R343.75 million going to Phuthuma Nathi) |
What to Watch Next
- Completion of the reorganisation: Once LicenceCo is formally carved out, share transfers to HDP entities / workers are done, etc.
- Release of updated timetable: For mandatory offer to all MultiChoice shareholders, including non-South Africans.
- Legislative changes: There is talk that foreign ownership voting caps (currently 20%) might be revised upward (to 49%) via legislative changes. But that’s not assured and may take time.
- Effects on consumers: Will we see pricing changes, service changes, or content shifts (more local vs imported content)?
- Impact on competitors & content creators: Will HDP / BEE participants be able to scale, will there be more investment in local production?
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