By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa’s Competition Tribunal has approved Canal+’s 35 billion rand ($2 billion) takeover offer for TV broadcaster MultiChoice, subject to agreed conditions, the companies said on Wednesday.
The deal could potentially reshape Africa’s media landscape, kicking off a consolidation process aimed at countering global streaming giants such as Netflix.
The deal is transformative for Canal+ as part of its expansion in Africa, particularly in English-speaking regions, while for MultiChoice, it will provide much-needed capital to support its local content and innovation.
“The combined group will benefit from enhanced scale, greater exposure to high-growth markets and the ability to deliver meaningful synergies,” Maxime Saada, CEO of CANAL+ said in a statement.
Canal+, which was spun off from parent company Vivendi in December, made a firm offer last year of 125 rand in cash per MultiChoice share that it does not own, valuing MultiChoice at about 55 billion rand.
In May, the Competition Commission, which recommends approvals or rejections to the Tribunal, said the transaction was unlikely to substantially lessen or prevent competition.
The agreed conditions include a package of guaranteed public interest commitments proposed by the parties. The package supports the participation of firms controlled by Historically Disadvantaged Persons and Small, Micro and Medium Enterprises in the audio-visual industry in South Africa.
The total value of all the public interest commitments by the merger parties was projected to be about 26 billion rand over the next three years, the Commission said.
“This package will maintain funding for local South African general entertainment and sports content, providing local content creators with a strong foundation for future success,” the companies said.
In an effort to overcome regulations that prohibit foreign entities from owning more than 20% of a South African broadcasting licensee, MultiChoice Group will carve out its domestic unit which holds its broadcasting licence into a new independent entity, majority owned and controlled by Historically Disadvantaged Persons.
($1 = 17.5543 rand)
(Reporting by Nqobile Dludla in Johannesburg and Raechel Thankam Job in Bengaluru; Editing by Sherry Jacob-Phillips, Louise Heavens and Jane Merriman)
