MultiChoice acquisition by French company: Go-ahead suggested but with 3-year halt on job cuts
MultiChoice acquisition by French company: Go-ahead suggested but with 3-year halt on job cuts
The Competition Commission has recommended that the Competition Tribunal approve the proposed acquisition of MultiChoice by Groupe Canal+ SAS, subject to certain conditions such as halting any possible job losses because of the merger by three years.
This recommendation comes after the commission's investigation into the large merger notification submitted last year on September 30. The investigation was launched to determine whether the merge will lessen or prevent competition in the concerned market.
The commission, an agency of the of the Department of Trade, Industry and Competition, is one of three independent statutory bodies established in terms of the Competition Act to regulate competition between firms in the market.
The proposed merger explained
Canal+, along with its ultimate controllers and the companies they control (the acquiring group) is a French media and entertainment company involved in the production, commissioning, and supply of audiovisual content, the provision of advertising services, development of video games and publication of books.
LicenceCo is a proposed company within the merged group, containing local license rights and subscribers, which will broadcast content through DStv.
Meanwhile, the Target Group provides audiovisual content via its streaming service, Showmax.
'The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.
Conditions recommended for merger
'However, in recognition of the important role played by the Target Group 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,' the commission said.
The conditions include, but are not limited to:
addressing employment concerns,
increasing the shareholding of historically disadvantaged persons (HDP) and workers in Orbicom and LicenceCo committing to supplier development,
ensuring the merged entity continues to operate from South Africa,
promoting a diversity of television news,
and encouraging export activities.
According to the commission, the parties involved in the merger have agreed to a three-year moratorium on layoffs following the merger implementation date.
Involved parties commits to keeping MultiChoice in SA
'The merger parties have also committed that the majority of LicenceCo's shareholders will be HDPs and workers. Moreover, the parties have agreed to continue certain corporate social responsibility initiatives such as skills development in the audiovisual industry and sports development.'
Canal+ has committed to ensuring that MultiChoice remains incorporated and headquartered in South Africa, promotes exports, and seeks a secondary inward listing on the Johannesburg Stock Exchange.
The merged entity has also made supplier development commitments that include expenditure on local audiovisual content, the promotion of South African audiovisual content in new markets, and procurement from HDPs and small, medium and micro enterprises.
'Finally, the parties have agreed that LicenceCo will continue to procure local news content for DStv and will ensure the diversity of the news content it broadcasts.'
Multi-billion rand value projected
The total value of all the public interest commitments advanced by the merger parties based on past spend by MultiChoice is projected at a total amount of about R26b over the next three years.
'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,' Deputy Commissioner Hardin Ratshisusu explained. – SAnews.gov.za
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