MultiChoice set to acquire new investors to modify Canal+ takeover

MultiChoice Group has announced reorganisation plans in preparation for its sale to France’s Group Canal+. This comes days after South Africa’s Competition Tribunal approved a $2 billion (35 billion rand) takeover of MultiChoice Group by the French Media Giant.

According to a Monday statement, seen by TechCentral, MultiChoice Group will be obtaining a new range of investors in preparation to comply with South African legislation that prevents foreign entities from holding more than 20% of the voting rights in locally licensed broadcasters.

In the new structure, MultiChoice, LicenceCo (created to hold the Group’s broadcasting licence), Phuthuma Nathi Investments, 13th Ave Investments, Identity Partners, Itai Consortium (IPIC), and the trustees of the MultiChoice Workers Trust have entered into transaction agreements.

The new shareholders will have rights to subscription, repurchase, and other rights similar to those of other investors. Upon the implementation of the transactions, MultiChoice will hold 20% of the voting rights in LicenceCo’s ordinary shares and a 49% economic interest. 

In addition to the move to comply with South African regulations limiting foreign ownership of broadcasting licenses to 20%, MultiChoice will carve out its domestic unit into a new entity, LicenceCo. This independent company will be majority-owned by Historically Disadvantaged Persons (HDPs) and workers, ensuring compliance with local laws.

The parties have also committed to no worker retrenchments for three years and increased participation of HDP-controlled firms and small businesses in the audiovisual industry.

The group will also declare an extraordinary dividend to its shareholders of 1.375 billion rand, where 343.75 million rand will go to Phuthuma Nathi, and the payment is subject to the implementation of the steps in the reorganisation plans.

“The net economic effect of the reorganisation for MultiChoice is that 26% of the economic interest in LicenceCo, the licensed broadcasting service provider that contracts with South African subscribers, will be disposed of, and 15% of the economic interest in Orbicom, the licensed signal distributor and holder of electronic communications and radio frequency spectrum licences, will be disposed of,” the group said. 

Under the plan, Phuthuma Nathi will increase its effective shareholding in Orbicom from 25% to 40%. Phuthuma Nathi is a listed broad-based black economic empowerment vehicle.

Orbicom is a subsidiary of MultiChoice, acting as its signal distributor. It handles the transmission of MultiChoice’s broadcasting signals, including those for DStv and GOtv. In the plan, Orbicom’s licenses for electronic communication and radio frequency spectrum are being transferred to Canal+ as part of the acquisition.

Also Read: Canal+ $2 billion MultiChoice acquisition okayed by South Africa’s Competition Tribunal.

MultiChoice’s compliance with ECA

South Africa’s Competition Tribunal’s approval of the acquisition follows a positive recommendation from South Africa’s Competition Commission in May 2025. The Commission found the deal unlikely to harm competition but imposed conditions to address public interest concerns. These include a $1.4 billion (26 billion rand) commitment over three years to support local content, skills development, and corporate social responsibility initiatives, such as sports development.

In July, MultiChoice said that the new structure for its South African operation will meet the requirements of every local law, including the restrictions on foreign ownership and control of South African broadcasting licences contained in the Electronic Communications Act (ECA).

MultiChoice South Africa Holdings will declare an extraordinary dividend to its shareholders of 1.375 billion rand.

“The structure includes MultiChoice (Pty) Ltd, the entity which contracts with South African subscribers, being carved out of MultiChoice Group and becoming an independent entity, majority owned and controlled by HDPs,” the company said.

The “historically disadvantaged persons” is a definition used in the ECA to deal with black economic empowerment rules.

The company stressed that the reorganisation is specifically designed to ensure that the licensed entities within the Group remain compliant with foreign control restrictions under the ECA, thereby preserving the integrity of the company’s broadcasting and signal distribution licences.

However, under the proposed legislative changes, the 20% restriction is likely to be lifted to 49%.