Canal+ makes non-binding offer to acquire Multichoice

French TV giant, Canal+ has offered to up its stake in South Africa's Multichoice, acquiring the rest of the company. Canal+ currently owns a 31.67% stake in the South African pay-TV provider and is pricing the deal at $1.7 billion.

"According to Maxime Saada, chairman and CEO of Canal+, "For MultiChoice to continue to thrive in Africa it will require a strategy that enhances its scale as well as strengthened local and global expertise. Our potential offer, if successful, would be an important next step for MultiChoice to realise its full potential."

MultiChoice, which operates in 50 countries across sub-Saharan Africa, announced that it has received a letter from Canal+ and will keep shareholders informed about any new updates. Canal+'s acquisition of Africa's largest pay-TV company will allow it to expand its control to the rest of the continent. MultiChoice, through its platforms DStv and Showmax, has 22 million subscribers in Africa, with 8.6 million coming from South Africa, while Canal+ has 8 million.

The pay-TV market in Africa could grow from $5 billion to $6.4 billion by 2028, with 57 million subscribers (+39%), according to Digital TV Research. However, Simon Murray, a principal analyst at the research firm said: "No new major players will start. Instead, these three operators [Multichoice, StarTimes and Canal+] will battle for supremacy."

Canal+'s recent move appears to be part of this battle for supremacy. By 2027, MultiChoice's DStv is predicted to hold a 14.6% market share, while Canal+ is expected to have a 10.7% share. If the two companies consolidate, their combined share would reach 25.3%, surpassing StarTimes's projected share of 12.6%.

"StarTimes is stagnating somewhat because a lot of essential content, such as sporting events, is becoming increasingly expensive," says Mark Narramore, an analyst at Excelsia Capital.

Other analysts speculate that Canal+ will face regulatory hurdles in the South African market, which may prevent them from completing a full takeover. This is because South African legislation restricts the foreign ownership of local broadcasters to 20%.

"This is not a done deal. Canal+ has made a non-binding offer to the board of Multichoice, pending due diligence. The board could turn it down, the French could back out, or it could be blocked by South African regulators," Larry Madowo, a business journalist and international correspondent at CNN said.