French media giant Canal+ is advancing towards a full acquisition of MultiChoice despite facing legal hurdles in South Africa.
Details of the Canal+ Deal
Canal+ has offered to buy the remaining MultiChoice shares at R125 per share. The increased stake led to a mandatory offer valued at around R55 billion. Despite the legal challenges, the deal is expected to conclude later this year.
Structural Changes in MultiChoice
To comply with regulations, MultiChoice proposed a new corporate structure, establishing LicenceCo to manage broadcasting licenses and subscriptions in South Africa. The shares of this company will be distributed among historically disadvantaged South Africans and MultiChoice itself. This restructuring aims to adhere to the foreign ownership cap of 20%.
Regulatory Comments and Market Impact
The Competition Commission and the Independent Communications Authority of South Africa are reviewing the acquisition and restructuring proposals from MultiChoice. Their decision will be critical for the Canal+ deal’s completion. The restructuring is driven by the need to align company operations with the law, allowing new investors to join LicenceCo.
The Canal+ and MultiChoice deal underscores the French company’s ambitions to dominate the African media market. The success of the reorganization and further regulatory actions will determine its fate.
