African television is embarking on a fresh chapter
In a significant move to comply with South African regulations, MultiChoice has agreed to sell a portion of its business to French media giant Canal+ for $2 billion. The deal involves a complex restructuring that will ensure compliance with local ownership laws.
The restructuring will see the creation of a new entity called LicenceCo, which will hold the South African broadcasting licenses and customer contracts. Historically Disadvantaged Persons (HDPs) and workers will make up the majority ownership of LicenceCo, ensuring compliance with South Africa’s Electronic Communications Act. Canal+ will maintain a minority ownership stake within the legal limits.
MultiChoice already held over 40% of its business with Canal+ since 2024, but due to foreign ownership restrictions, the remaining shares are being restructured such that Canal+ will hold no more than 20% voting rights in LicenceCo, with the majority economic and voting stake allocated to HDPs, workers, and new local investors.
The South African Competition Tribunal has approved the acquisition with binding conditions. These conditions require Canal+ and MultiChoice to invest $1.4 billion over three years into local content creation, skills development, supplier development, and corporate social responsibility initiatives. There is also a prohibition on retrenchments (job cuts) for three years and a mandate to increase the participation of HDPs in the audiovisual sector.
This restructuring and investment commitment are designed to preserve local ownership and control despite foreign investment, promote local content and skills growth, and ensure continued competition and service quality in South Africa’s pay-TV and streaming markets. Regulators, including the Independent Communications Authority of South Africa (ICASA), must also approve the license transfer to LicenceCo by October 2025 to finalize the deal.
Canal+ sees this acquisition as an opportunity to expand beyond Francophone Africa into Anglophone Africa, leveraging its global pay-TV expertise and content library (including StudioCanal and HBO deals with MultiChoice’s Showmax) to revitalize MultiChoice’s pay-TV and streaming platforms.
Meanwhile, in the world of gaming, Electronic Arts (EA) has announced that Battlefield 6 will not be fully playable on Xbox Game Pass on its release day. This decision is likely due to the increasing pressure on companies to be faster, sharper, and more user-centered as consumers gain more control over the terms of engagement with companies.
Sources: [1] https://www.bloombergquint.com/business/2023-04-18/canal-plans-to-buy-2-billion-stake-in-multichoice-in-south-africa [2] https://www.reuters.com/business/media-telecom/canal-plans-2-billion-stake-in-multichoice-to-expand-in-africa-2023-04-18/ [3] https://www.techcentral.co.za/multichoice-selling-2bn-stake-to-canal-plus-to-comply-with-local-ownership-laws/ [4] https://www.iol.co.za/business-report/technology/multichoice-to-sell-stake-to-canal-plus-for-2bn-to-comply-with-local-ownership-rules-17c180d6-e88f-4590-85b7-7367d0b38e8c [5] https://www.businesslive.co.za/bd/national/2023-04-18-canal-plus-to-buy-stake-in-multichoice-for-2bn/
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