Big announcement about MultiChoice in South Africa

MultiChoice and French media giant Groupe Canal+ have proposed significant changes to the corporate structure of South Africa’s pay-TV giant to comply with local broadcasting regulations regarding ownership and control.
In a notice to shareholders on Tuesday, the companies announced that they plan to restructure the MultiChoice Group to carve out an independent entity that will hold its South African operating licences.
The latest announcement from the two companies comes after Canal+ offered to acquire MultiChoice when it triggered South Africa’s mandatory offer threshold of 35% ownership.
Canal+ has steadily bought up MultiChoice stock on the open market since October 2020 and hit the threshold at the beginning of 2024.
After some wrangling from MultiChoice and a reprimand from the Takeover Regulation Panel, Canal+ offered R125 per share, valuing the company at over R55 billion.
The buyout will cost Canal+ over R30 billion in cash, and it continued buying MultiChoice shares while its offer is being considered.
The Takeover Regulation Panel last reported in May that Canal+’s shareholding stood at 45.2%.
While Canal+ was mandated by law to put in an offer to acquire MultiChoice, boosting the South African company’s share price, several regulatory hurdles must be overcome.
For the transaction to proceed, the companies must secure approvals from the Financial Surveillance Department, Competition Tribunal, the JSE, Takeover Regulation Panel, and the Independent Communications Authority of South Africa (Icasa).
ICT policy legal expert Lisa Thornton told MyBroadband that the deal’s success will depend on its structure.
Crucially, the companies will need to find a way to continue limiting Canal+’s voting rights in MultiChoice to 20%, a requirement for broadcasting licensees under the Electronic Communications Act.
Additionally, the transaction will have to meet Broad-based Black Economic Empowerment (BBBEE) rules set out by industry regulator Icasa, which says licensees must be 30% owned by historically disadvantaged individuals.

To comply with local regulations, MultiChoice (Pty) Ltd will be carved out as an independent entity to hold its South African operating licences. MultiChoice refers to this entity as LicenceCo.
In addition to holding the operating licences for South Africa, LicenceCo will also continue to contract with MultiChoice’s South African subscribers.
The remainder of the group’s video entertainment assets will remain part of the MultiChoice Group.
LicenceCo will be majority-owned by historically disadvantaged persons, as follows:
- Phuthuma Nathi, which will ultimately hold a 27% economic interest
- Two well-established black-owned and managed companies: Identity Partners Itai Consortium and Afrifund Consortium
- A Workers’ Trust (ESOP)
Canal+ and MultiChoice said Identity Partners and Afrifund bring highly experienced leaders with great commercial and industry knowledge.
MultiChoice Group’s shareholding in LicenceCo will ultimately give it a 49% economic interest and 20% share of voting rights.
“MultiChoice Group will retain its existing 75% direct interest in MultiChoice South Africa, which will exclude LicenceCo. Phuthuma Nathi will similarly retain its existing 25% interest in MultiChoice South Africa,” the companies explained.
“LicenceCo will enter into various commercial agreements with MultiChoice Group subsidiaries in relation to the services currently provided to LicenceCo by other MultiChoice Group entities,” they said.
“These relate to, among other things, the provision of content, technology, subscriber management and support and other functions.”
Canal+ and MultiChoice assured that the transaction would not lead to any disruption for LicenceCo’s South African viewers.
“In time those subscribers will benefit from the additional content and technology investments envisaged by the MultiChoice Group, in its capacity as supplier to LicenceCo,” they said.
“Canal+ and MultiChoice are confident that the envisaged structure meets the requirements of all applicable laws, including the restrictions on foreign ownership and control of broadcasting licences contained in the Electronic Communications Act.”

Canal+ CEO Maxime Saada said the transaction was an opportunity to create a unique global media company.
“A company with a strong presence across Africa, with the scale, expertise and creativity to compete and partner with the largest players within the media sector and beyond,” said Saada.
“We remain committed to deliver on our ambition to bring MultiChoice and Canal+ together, with today’s announcement representing another step forward.”
MultiChoice Group CEO Calvo Mawela said they were very pleased about the progress that has been made in relation to the transaction.
“In a fast-evolving industry that is becoming increasingly competitive, the opportunity to combine our efforts to increase scale and bring our subscribers an even better offering is something that continues to excite us,” Mawela said.
“MultiChoice has a long and proud history of creating significant value for the shareholders of Phuthuma Nathi, one of the most successful BBBEE schemes in South Africa,” he continued.
“To continue this journey with Phuthuma Nathi, while at the same time broadening the BBBEE participation in our business through new partnerships that also involves our staff, is an inspiring prospect.”