South Africa Approves MultiChoice’s US$1.9bn Buyout by France’s Canal+

In a pivotal decision that promises to redefine the landscape of African entertainment, South Africa’s Competition Tribunal has granted conditional approval for the acquisition of MultiChoice Group Limited by French media giant Groupe Canal+ SAS. This landmark deal, valued at approximately R55 billion (equivalent to around US$3 billion at the time of the offer), marks a significant strategic consolidation aimed at creating a dominant pan-African media powerhouse capable of competing with global streaming behemoths. The Tribunal’s approval, however, comes with a robust set of legally binding conditions, underscoring South Africa’s unwavering commitment to safeguarding local employment, promoting indigenous content, and fostering economic transformation within its vital broadcasting sector.

The journey towards this acquisition has been a gradual one, with Canal+, a subsidiary of the French conglomerate Vivendi, steadily increasing its stake in MultiChoice over several years. Building on its existing ownership of over 45% of MultiChoice Group’s issued ordinary shares, Canal+ made a firm offer to acquire up to 100% of the remaining shares, signaling its deep-seated ambition to solidify its presence across the African continent. This strategic move is seen by analysts as a crucial step for Canal+ to enhance its scale, gain greater exposure to high-growth African markets, and unlock significant synergies by combining its extensive operations in 25 African countries with MultiChoice’s vast reach across 50 sub-Saharan African markets.

The Regulatory Imperative: Protecting South African Interests

Central to the Competition Tribunal’s decision is a comprehensive package of public interest commitments proposed by the merging parties. These conditions are not merely recommendations but are legally enforceable, reflecting the South African government’s stringent regulatory framework designed to ensure that major mergers contribute positively to the national economy and society.

A cornerstone of these conditions is an absolute prohibition on any retrenchments of South African employees across Canal+, MultiChoice Group Limited, and MultiChoice (Pty) Ltd (referred to as “LicenceCo”) for a period of three years following the implementation of the merger. This commitment provides crucial job security for thousands of employees in a sector that is a significant employer. Furthermore, the companies have pledged that the merger will not negatively impact existing terms and conditions of employment for South African staff, ensuring stability and fair treatment for the workforce.

Beyond employment, the deal places a strong emphasis on promoting local ownership and fostering development within the South African broadcasting sector, particularly in line with the country’s Broad-Based Black Economic Empowerment (B-BBEE) policies. To comply with South African broadcasting regulations, which cap foreign ownership of a domestic broadcasting licensee at 20%, the transaction mandates the separation of MultiChoice Group’s broadcasting services arm, LicenceCo. This newly independent entity will be majority-owned and controlled by Historically Disadvantaged Persons (HDPs), with Canal+ holding a minority stake and voting rights. This structural separation is a critical mechanism to ensure that control over South Africa’s broadcasting airwaves remains predominantly in local hands, aligning with national transformation objectives.

The public interest commitments also extend to significant investments in the local creative economy. Canal+ has pledged to invest between R26 billion and R30 billion over the next three years. These funds are earmarked for initiatives that support South Africa’s public interest priorities, including maintaining funding for local South African general entertainment and sports content. This commitment is vital for local content creators, providing them with a strong foundation for future success and ensuring that African stories continue to be told and celebrated on screen. The deal also promotes the participation of Small, Medium and Micro Enterprises (SMMEs) and HDP-controlled firms in the audio-visual industry, aiming to broaden economic inclusion and develop a more diverse supplier base. Additionally, MultiChoice’s headquarters will remain in South Africa, and a secondary listing on the Johannesburg Stock Exchange (JSE) is required within nine months post-merger, further cementing its ties to the South African economy. The long-stop date for meeting all merger conditions has been extended to October 8, 2025, allowing ample time for the complex regulatory and structural adjustments.

MultiChoice: An African Entertainment Behemoth Under Pressure

MultiChoice has long stood as a colossus in African entertainment. For decades, its DStv and GOtv platforms have been synonymous with pay-TV across sub-Saharan Africa, offering a diverse array of video entertainment products and services through linear satellite and, more recently, streaming platforms. Its extensive reach spans 50 countries, connecting with over 23.5 million households and delivering a wide range of content, from premium sports like the English Premier League via SuperSport to popular local dramas and international blockbusters.

However, even a giant like MultiChoice has not been immune to the relentless pressures of a rapidly evolving global media landscape and challenging macroeconomic conditions. The company has grappled with a confluence of factors that have significantly impacted its subscriber base and financial performance. Macroeconomic strain across various African markets, characterized by high inflation, currency depreciation, and reduced consumer spending power, has made pay-TV subscriptions a luxury many households can no longer afford. For instance, the original news reported a 15% decline in DStv and GOtv subscribers in Kenya, indicative of broader regional trends.

Adding to these woes is the pervasive issue of rising piracy, which continues to erode legitimate subscription revenues. Illicit streaming services and unauthorized sharing of content pose a significant threat, offering consumers cheaper, albeit illegal, alternatives. Furthermore, the burgeoning competition from global streaming giants like Netflix, Amazon Prime Video, and Disney+, alongside a proliferation of local streaming services and the pervasive influence of social media platforms, has fragmented the audience and intensified the battle for eyeballs and wallets.

These headwinds have translated into tangible declines for MultiChoice. The company reported a 9% year-on-year fall in group revenue for the year ended March 31, 2025, primarily driven by an 11% decrease in subscription revenues. This decline was compounded by significant currency slippages against the US dollar, which negatively impacted the group’s top line by R10.2 billion (approximately US$575 million) over the past two financial years. The deconsolidation of its insurance unit, NMSIS, from December 2024, also contributed to the revenue dip. Overall, MultiChoice’s active linear subscriber base shrank by 1.2 million (8% year-on-year) to 14.5 million, with losses evenly split between South Africa and the rest of Africa. Over the past two financial years, the group lost a total of 2.8 million active linear subscribers.

The falling subscription numbers for its traditional pay-TV services can also be directly attributed to a series of price hikes. MultiChoice implemented increases in its pay-TV packages in October last year, following an earlier hike in April. These adjustments, often necessitated by rising operational costs and currency volatility, have met with significant consumer backlash, even prompting legal action in Nigeria where the Federal Competition and Consumer Protection Commission (FCCPC) has challenged the company’s pricing decisions in court, arguing that MultiChoice’s “capricious, arbitrary and incessant exorbitant price increases” exploit consumers.

Despite these significant challenges, MultiChoice has demonstrated remarkable resilience. The group managed to return to profitability, reporting a net profit of over US$100 million for the year ended March 31, 2025. This turnaround was supported by disciplined cost management, with the company achieving R3.7 billion in cost savings, nearly double its initial target. MultiChoice Group CEO, Calvo Mawela, acknowledged the difficulties but emphasized the company’s focus on strategic execution and investment in new growth opportunities to remain Africa’s entertainment platform of choice.

Canal+: A French Giant’s African Ambition

Groupe Canal+, a leading French media company, has a long-standing history in the global entertainment industry. While it was a subsidiary of Vivendi until its spin-off in December 2024, it has always maintained a strong international footprint, particularly in Africa. Canal+ International, a key subsidiary, boasted 8.1 million subscribers in Africa by the end of 2023, operating across French-speaking and Portuguese-speaking territories. Its African strategy has been clear: to expand its reach and consolidate its position in a continent characterized by a young, rapidly growing population and increasing digital adoption.

The acquisition of MultiChoice is a game-changer for Canal+. It provides Canal+ with immediate access to MultiChoice’s vast English-speaking subscriber base and its extensive content library, including the highly popular SuperSport. This merger will create a truly pan-African entity, capable of delivering content in multiple languages and catering to diverse cultural preferences across the continent. For Canal+ CEO Maxime Saada, this deal is “transformative,” promising enhanced scale, greater exposure to high-growth markets, and the ability to deliver meaningful synergies that will enable the combined group to better compete with global streaming giants like Netflix, Disney+, and Amazon Prime Video.

The Shifting Sands of African Media: The Rise of Streaming

The African media landscape is undergoing a profound transformation, driven by increased internet penetration, smartphone adoption, and changing consumer preferences. While linear pay-TV has historically dominated, the rise of Over-The-Top (OTT) streaming services has introduced a new dynamic, offering consumers more flexible and often more affordable entertainment options.

MultiChoice’s own streaming platform, Showmax, has emerged as a critical component of its strategy to adapt to this shift. Despite the decline in linear subscribers, Showmax saw a robust 44% year-on-year increase in active paying users following a price adjustment in March. This growth is a testament to the platform’s strategic focus on African markets and its ability to offer compelling local and international content. According to Omdia Research, Showmax has even surpassed Netflix to become the leading paid video streaming service in Africa, capturing a 40% market share compared to Netflix’s 35%.

Showmax’s success can be attributed to several strategic moves. It has expanded its reach to 44 countries and has strategically refocused on the African continent. A significant development was the acquisition of a 30% stake in Showmax by Comcast (parent company of NBCUniversal) in March 2023. This partnership provided Showmax with cutting-edge technology, financial stability, and access to a plethora of blockbuster English-language content from renowned studios like HBO, Universal Pictures, and Sky. Furthermore, Showmax has strategically invested in local content production and secured exclusive streaming rights for popular sports, such as the English Premier League, which resonates strongly with African audiences.

However, the streaming market in Africa faces its own set of challenges. High broadband costs, unstable internet connectivity, and low average incomes remain significant barriers to widespread adoption. Despite these hurdles, the OTT market in Africa is projected to continue growing, with significant investments in infrastructure and content. South Africa alone is expected to add nearly 1.6 million additional OTT subscribers by the end of 2028. The competition is fierce, with global players like Netflix actively licensing and producing original African content, and local players vying for market share. Nigeria and Egypt, in particular, are emerging as major hubs for local content production, with a significant volume of movies and series being produced in these countries and distributed on streaming services across the continent.

Implications for the African Entertainment Ecosystem

The MultiChoice-Canal+ merger has profound implications for the entire African entertainment ecosystem.

• Enhanced Competition: While the merger creates a powerful entity, it also intensifies competition with other global and local players. The increased scale and resources of the combined group will enable it to invest more heavily in content acquisition, production, and technology, potentially raising the bar for all participants in the market.
• Local Content Boost: The commitment to significantly invest in South African general entertainment and sports content is a major win for local creators, producers, and talent. This could lead to a golden age of African storytelling, with more diverse and high-quality productions reaching wider audiences. The B-BBEE conditions further ensure that these opportunities are inclusive and contribute to broader economic empowerment.
• Job Security and Skills Development: The three-year no-retrenchment clause offers a period of stability for employees, allowing for a smoother integration process. The emphasis on skills training and supplier development will also contribute to building a more robust and skilled workforce within the industry.
• Consumer Impact: For consumers, the merger could mean a more diverse and higher-quality content offering, potentially at more competitive prices as the combined entity leverages its scale. However, concerns about potential price hikes in the future, especially given MultiChoice’s past actions, will likely remain a point of scrutiny for regulators and consumer advocacy groups. The ongoing legal battle in Nigeria highlights the sensitivity of pricing in these markets.
• Pan-African Reach: The combined entity will have an unparalleled pan-African footprint, capable of distributing content across English, French, and Portuguese-speaking markets. This cross-border reach could facilitate greater cultural exchange and the wider dissemination of African content globally.

Looking Ahead: A New Chapter for African Broadcasting

The conditional approval of Canal+’s acquisition of MultiChoice marks the beginning of a new chapter for African broadcasting. It signifies a strategic recognition of Africa’s immense potential as a growth market for media and entertainment, driven by its youthful demographics, increasing urbanization, and growing digital connectivity.

The deal is a testament to the evolving dynamics of the global media industry, where traditional pay-TV operators are adapting to the rise of streaming, and international players are increasingly looking to expand into emerging markets. The conditions imposed by the South African Competition Tribunal set an important precedent, demonstrating how national interests, particularly those related to economic transformation and local empowerment, can be integrated into large-scale international mergers.

As the combined MultiChoice-Canal+ entity moves forward, its success will hinge on its ability to navigate the complex interplay of technological innovation, consumer preferences, and diverse regulatory environments across the continent. By leveraging its enhanced scale, investing strategically in local content and talent, and adapting to the unique challenges and opportunities of the African market, this new media giant has the potential to not only reshape the continent’s entertainment landscape but also to become a significant force in the global media arena. The coming months, leading up to the October 2025 long-stop date, will be crucial as the parties work to fulfill all conditions and solidify what promises to be a transformative merger for African entertainment.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

28th July, 2025