Pretoria: The Competition Commission has recommended that the Competition Tribunal approve the proposed acquisition of MultiChoice by Groupe Canal+ SAS, subject to certain conditions. This follows an in-depth investigation by the Commission, an agency under the Department of Trade, Industry and Competition, into the large merger notification submitted on 30 September 2024.
According to South African Government News Agency, the Commission, which is one of three independent statutory bodies established under the Competition Act to regulate market competition, has stated that the proposed transaction is unlikely to substantially lessen or prevent competition in any market. However, the Commission has proposed conditions to address public interest concerns raised by stakeholders, recognizing the Target Group’s significant role in South Africa’s audiovisual ecosystem.
The acquiring group, Canal+, is a French media and entertainment conglomerate involved in various sectors, including audiovisual content production, advertising services, video game development, and book publishing. Within the merged entity, LicenceCo is a proposed company that will hold local license rights and subscribers, broadcasting content through DStv. Meanwhile, the Target Group provides audiovisual content via its streaming service, Showmax.
The Commission’s recommended conditions focus on employment, increased shareholding of historically disadvantaged persons (HDP) and workers in Orbicom and LicenceCo, supplier development, maintaining operations in South Africa, promoting diverse television news, and encouraging export activities. A key condition includes a three-year moratorium on layoffs post-merger, agreed upon by the parties involved.
The merger parties have also committed to ensuring the majority of LicenceCo’s shareholders will be HDPs and workers while continuing corporate social responsibility initiatives such as skills and sports development. Additionally, Canal+ has pledged to keep MultiChoice incorporated and headquartered in South Africa, promote exports, and pursue a secondary inward listing on the Johannesburg Stock Exchange (JSE) Limited.
Supplier development commitments by the merged entity include expenditure on local audiovisual content, promoting South African content in new markets, and procurement from HDPs and small, medium, and micro enterprises (SMMEs). Moreover, LicenceCo will continue to procure local news content for DStv, ensuring diversity in its broadcasts.
The public interest commitments from the merger parties are projected to amount to about R26 billion over the next three years, based on MultiChoice’s past expenditures. Deputy Commissioner Hardin Ratshisusu explained that the Commission is required to assess and recommend actions in large mergers, and is satisfied that the conditions attached to this merger sufficiently address the concerns identified during the investigation. The matter now awaits a final determination by the Tribunal.