The Acquisition of MultiChoice by Canal+: A Strategic Move in the African TV Market
The recent announcement of Canal+’s acquisition of MultiChoice marks a significant shift in the African television landscape. This move is part of a broader strategy by the Bolloré Group, which controls Canal+, to expand its influence and become a dominant player in the African TV market.
The acquisition, valued at approximately ZAR 125.00 per share, represents a premium over the regulatory minimum and reflects the confidence of Canal+ in the potential of the combined entity. The deal is expected to bring substantial benefits to stakeholders, including a significant value realization for MultiChoice shareholders and an enhanced service offering for consumers across Africa.
Canal+’s strategy appears to be focused on creating a global entertainment leader with Africa at its heart. By leveraging MultiChoice’s extensive subscriber base across the continent and combining it with Canal+’s international reach, the merged entity aims to compete effectively with major international media companies and streaming platforms.
Moreover, the acquisition is set to support the South African creative and sporting economy by providing a stable foundation for long-term investment in the sector. It also emphasizes the commitment to fostering Broad-Based Black Economic Empowerment (B-BBEE) initiatives and the transformation of MultiChoice’s South African business.
The move by Canal+ is not just a business transaction; it is a strategic play that could reshape the media landscape in Africa. With the ambition to take authentic African stories to a global audience, the Bolloré Group is positioning itself as a key player in the cultural and commercial development of the continent’s entertainment industry.
As the acquisition progresses, it will be interesting to observe how this strategy unfolds and what implications it will have for the future of television in Africa. The potential for growth and innovation in this space is immense, and Canal+’s acquisition of MultiChoice could well be the catalyst needed to unlock new opportunities in the African market.
The Implications for MultiChoice Subscribers Post-Acquisition
The acquisition of MultiChoice by Canal+ is poised to bring about a series of changes for subscribers of the South African media company. With the transaction set to enhance MultiChoice’s offerings, subscribers can anticipate a range of implications that could redefine their viewing experience.
One of the primary implications for subscribers is the potential for an enriched content library. The merger with Canal+ could provide MultiChoice subscribers access to a broader array of international and local programming. This means more diverse entertainment options, catering to a wider range of tastes and interests.
Subscribers may also benefit from improved technology and service delivery. The acquisition promises to underpin services with technology solutions owned by the combined company, which could translate into better streaming quality, user interfaces, and customer service.
Another significant implication is the support for the South African creative and sporting economy. The deal is expected to provide a stable foundation for long-term investment in local content creation, which could lead to more original South African productions being featured on MultiChoice platforms.
Furthermore, the acquisition underscores a commitment to Broad-Based Black Economic Empowerment (B-BBEE) initiatives and the transformation of MultiChoice’s South African business. This could mean more opportunities for local talent and businesses, as well as content that reflects the diverse cultural landscape of South Africa.
For investors, the deal offers a chance to benefit from the future growth of the combined business through a listing on the Johannesburg Stock Exchange (JSE). This could provide a way for South African investors to remain part of the evolving media landscape.
In summary, the acquisition of MultiChoice by Canal+ is expected to bring about enhanced service offerings, a richer content library, technological advancements, and a boost to the local creative industry. As the details of the acquisition continue to unfold, subscribers and stakeholders alike will be watching closely to see how these potential benefits materialize in the evolving African television market.
Already present in 25 African countries, the Canal+ group of Frenchman Vincent Bolloré has found a trick to acquire the South African MutliChoice, present in 16 countries on the continent and with more than 20 million subscribers.
At Canal+, the objective remains the same: to conquer all of Africa. The French subscription television giant wants to expand its influence on the continent. Already present in 25 countries, the subsidiary of the Vivendi group, mainly controlled by Vincent Bolloré, has set its sights for several months on a market that it does not (yet) control: English-speaking Africa. The top management of Canal+ is indeed keen to buy the South African MutliChoice, present in 16 African countries. The French audiovisual group already holds shares in this other heavyweight, owner of channels such as Super Sport, Dstv and Showmax, but its management now wants all of the stakes.
It all started in January, when Canal+ submitted a first non-binding offer to the Board of Directors of the South African operator MultiChoice (of which the French held around 31.67% of the capital at the time), with a view to buying back the all of its shares at 105 rand per share (around $5.52), valuing the South African giant at 31.7 billion rand. This offer, 40% higher than MultiChoice’s market value, was rejected by the company which considered itself undervalued. In February, Canal+ decided to increase its share in MultiChoice, from 31.67% to 35.01%, thus crossing the threshold which required it to launch a public purchase offer (OPA) according to the rules of the Takeover Regulation Panel (TRP), the Takeover Regulatory Committee in South Africa. This announcement caused MultiChoice’s stock to jump by more than 20%.
Strategy
A few days later, Vincent Bolloré’s group further increased its stake to 36.6%, raising its offer to 125 rand (6 euros) per share, paid in cash, i.e. a valuation of MultiChoice Group at 2.6 billion euros (treasury shares excluded). Driven by a trick which consists of obtaining more shares at an affordable price and then paying the percentage of the sum corresponding to the proportion of the capital that it does not hold, when purchasing MultiChoice, Canal+ bought 3, 7 million additional shares of the South African broadcaster on April 12. This strategy allowed it to increase its share to 40.83%. “Purchasing additional shares at a more or less lower price may be a strategy to increase participation at a lower cost compared to a tender offer, but this depends on market conditions and the strategic motivations of the company. buyer,” explains an expert.
The Canal+ and MultiChoice groups have concluded a cooperation agreement concerning the preparation and implementation of the French+ group’s mandatory offer. “The mandatory offer will be entirely financed by the funds available to the Canal+ group. The TRP was given an irrevocable and unconditional bank guarantee,” the French giant communicated. Therefore, in accordance with stock exchange regulations in South Africa, the board of directors of MultiChoice appointed Standard Bank as an independent expert to express an opinion on the fairness and reasonableness of the terms of the mandatory offer. The two groups combined have just over 30 million subscribers worldwide.
Refocusing on the media
The planned acquisition of MultiChoice indeed strengthens Bolloré’s new strategy. The group sold its port and logistics assets, its original activities with which it built its fortune, to the Italian-Swiss giant MSC, raking in more than 5.5 billion euros at the end of 2022, to refocus on the media. Canal+ already has a strong presence in French-speaking African countries, while MultiChoice dominates in English-speaking regions, including South Africa, Nigeria and Kenya. Africa represents the fourth market of its parent company, Vivendi, and contributes 990 million euros to turnover (up 45 million euros, or 10% of overall turnover which stands at 10.51 billion euros) and a little more than 1.4 billion euros in assets in 2023. At the end of this financial year, the overall portfolio of Canal+ group subscribers (individual and collective) reached 8.09 million, compared to 7.59 million at the end of December 2022. With MultiChoice, there are approximately 56 million subscribers worldwide.
