MultiChoice’s independent board termed France’s Canal+ bid for the shares it does not own in South Africa’s MultiChoice as “fair and reasonable”.
Canal+, which is a part of the French media group Vivendi, made a firm offer of 125 rand in cash per MultiChoice share in April.
The total offer is about 35 billion rand ($1.88 billion), which valued the company at about 55 billion rand. The offer is expected to close by April 2025.
Why is Canal+ Interested in DStv?
Canal+’s interest in DStv is driven by several strategic factors:
- Competitive Advantage: By consolidating its position in the African market, Canal+ could gain a significant competitive advantage over other players.
2. Market Expansion: Acquiring DStv would allow Canal+ to significantly expand its footprint across Africa, particularly in key markets like South Africa, Nigeria, and Kenya.
3. Content Synergy: Combining the content libraries of both companies could create a more compelling offering for subscribers, attracting new customers and retaining existing ones.
4. Economies of Scale: A merged entity would benefit from economies of scale, leading to cost reductions and improved profitability.
Canal+ Bid DStv Fair and Reasonable
Maxime Saada, chairman and CEO of CANAL+, stated the amount offered on a media call. He said, “CANAL+ had already invested close to 1.2 billion euros in buying a 45.2% stake in MultiChoice.”
Also Read: MultiChoice and Canal+ Enter into a Cooperation Agreement for a Buyout Deal
Both parties are in the process of evaluating and concluding a suitable structure for the licensed activities of MultiChoice Group. It is to ensure compliance with the relevant restrictions on foreign control in executing the offer.
Canal+ bid DStv Faces Challenges
With the takeover now likely, Canal+ is left with the problem that South African regulations prevent foreign entities from exercising voting rights above a 20% threshold on holders of commercial broadcast licenses.
These might be strenuous but the French company will likely overcome that obstacle.
Saada said, “I don’t see the Black economic empowerment as a hurdle. The foreign ownership is a hurdle. I would rather the takeover happen fast. Not because I’m impatient, but because the competition doesn’t wait.”
Potential Impact of the Acquisition
If the deal goes through, it could have a profound impact on the African pay-TV landscape:
- Innovation: The combined resources of both companies could drive innovation in the pay-TV industry, leading to new products and services.
2. Increased Competition: The combined entity would likely intensify competition with other players, potentially leading to lower prices and improved services for consumers.
3. Job Market: The acquisition could lead to job cuts and restructuring, as the companies seek to streamline operations and reduce costs.
3. Content Diversity: The merged entity could offer a wider range of content, including local and international programming.
FAQ’s
Canal+ is interested in expanding its market presence in Africa, leveraging synergies between the two companies, and gaining a competitive edge.
The acquisition could lead to increased competition, lower prices, and a wider range of content for consumers.
The timeline for the acquisition is uncertain, as it depends on various factors, including regulatory approvals and negotiations between the two companies.
