Regulators have revealed the complex deal structure behind Canal+’s acquisition of MultiChoice, designed to navigate broadcasting control laws and secure full ownership of the pay-TV giant. During a session with the Portfolio Committee on Communications and Digital Technologies, the Independent Communications Authority of South Africa (ICASA) and the Competition Commission detailed the acquisition process, which involved a separate entity called LicenceCo holding the broadcasting service licence granted by ICASA.
The LicenceCo entity is presently not controlled by the MultiChoice Group or Canal+, and after the acquisition, it would have five shareholders, including the MultiChoice Group with 20%, Phuthuma Nathi Investments with 42.4%, Identity Partners Itai Consortium, Afrifund Consortium with 30%, and an employee-focused broad-based ownership trust with 8%. According to the ICASA website, the authority received correspondence from LicenceCo on September 30, 2024, regarding the proposed transaction.
Deal Structure and Regulatory Conditions
ICASA’s executive in charge of the Licensing and Compliance Division, Fikile Hlongwane, explained the timeline to the committee, stating that on October 29, 2024, ICASA replied to LicenceCo’s letter, stating that it did not share LicenceCo’s view but needed formal documentation regarding the proposed transaction before determining the applicability of section 13 of the Electronic Communications Act (ECA). The Competition Commission also played a crucial role in the acquisition process, ensuring that the deal did not violate any competition laws.
Public Interest Commitments and Compliance Requirements
The regulators briefed the committee on the public interest commitments and compliance requirements linked to the final approval of the Canal+ acquisition of MultiChoice. The committee was also informed about the regulatory conditions, including the requirement for LicenceCo to maintain its broadcasting service licence and comply with all applicable laws and regulations. Here are some key points regarding the acquisition:
- Canal+ acquired over 90% of the shares in MultiChoice.
- LicenceCo is a separate entity that holds the broadcasting service licence granted by ICASA.
- The acquisition involved a complex deal structure to navigate broadcasting control laws.
- The deal was approved by the Competition Commission and ICASA.
The acquisition of MultiChoice by Canal+ is expected to have a significant impact on the South African media landscape, and the regulators will continue to monitor the situation to ensure compliance with all applicable laws and regulations.
