MultiChoice sale to Canal+ clears major hurdleGroupe Canal+’s planned acquisition of MultiChoice Group just cleared a major hurdle: the Competition Commission on Wednesday recommended the deal be allowed to proceed – with conditions.
The commission said in a statement that it has recommended to its sister regulator, the Competition Tribunal, that the multibillion-rand broadcasting mega-deal be permitted.
“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market,” it said.
“However, in recognition of the important role played by [MultiChoice] within the broader audiovisual ecosystem in South Africa, and to address public interest concerns raised by various stakeholders, the commission has recommended approval of the merger subject to a number of conditions.”
These conditions include:
• Addressing employment concerns;
• An increase in the shareholding of historically disadvantaged persons (HDPs) and workers in a number of MultiChoice companies;
• Supplier development commitments;
• The merged entity’s continued operation from South Africa;
• Spending commitments on local content;
• The promotion of South African content in new markets;
• Procurement targets from small and black-owned companies; and
• Plurality of television news and export promotion.
The merger parties have agreed to a moratorium on retrenchments for a period of three years following the merger implementation date.
They have also agreed that LicenceCo, a new entity that will house MultiChoice’s South African broadcasting assets, will be majority owned by HDPs and workers. They will also continue “certain corporate social responsibility initiatives such as skills development in the audiovisual industry and sports development”.
Secondary listing
“In addition, Canal+ has undertaken that MultiChoice Group will remain incorporated and headquartered in South Africa, endeavour to promote exports, and will pursue a secondary inward listing on the securities exchange operated by the JSE.”
The total value of public interest commitments made by the merging parties and based on past spend by MultiChoice is projected at R26-billion over the next three years, the Competition Commission said.
Read: Canal+ buyout: Sipho Maseko to invest in MultiChoice entity
“In large mergers, the commission is required to assess and to ultimately make a recommendation to the tribunal. The commission is satisfied that the conditions attached to this merger sufficiently address the concerns raised during the investigation. The matter is now before the tribunal for a final determination,” said deputy competition commissioner Hardin Ratshisusu in the statement.
In a joint statement about the commission’s decision, both the Canal+ and MultiChoice CEOs, Maxime Saada and Calvo Mawela, welcomed the news.
