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IOL News
18-07-2025
- Business
- IOL News
Tribunal says Canal+ acquisition of MultiChoice presents minimal competition concerns
Multichoice has been struggling to retain subscribers for its pay television platform, DStv, ven as it seeks to expand its digital footprint through investments in online streaming service Showmax. Image: File Tawanda Karombo The Competition Competition said on Thursday that the planned acquisition of MultiChoice Group (MCG) by the French television powerhouse Canal+ has revealed minimal overlaps between the two entities, given their respective market sizes. However, the proposed merger will necessitate a fundamental restructuring to separate the licensed broadcasting unit, which will transition into a standalone entity named LicenseCo. MultiChoice has been struggling to retain subscribers for its pay television platform, DStv, ven as it seeks to expand its digital footprint through investments in online streaming service Showmax. The acquisition by Canal+ is positioned as a revitalising force for MultiChoice, pending final approvals from regulatory bodies and competition authorities. The Tribunal on Thursday heard from the Competition Commission that there were overlaps between MultiChoice and Canal+. These overlaps include included horizontal and vertical considerations. During the proceedings at the Tribunal, both companies have horizontal overlaps as they both supply video content for broadcasting purposes. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ It was the Competition Commission's findings that MultiChoice acquires and aggregate broadcasting content across sports and movies under its subsidiaries M-Net and SuperSport while Canal+ also has similar offerings although at a small scale. 'Vertically, Canal+ currently provides content to LicenseCo, which is part of MCG while its affiliated entity, Havas Media, purchases advertising space from MCG's sales house, Digital Media Sales (DMS),' said Ndivhuwo Moleya, senior analyst for mergers and acquisitions at the Competition Commission. The Commission said these links presented potential vertical overlaps in content and advertising supply chains, but it deemed them as insignificant. 'Looking at the number of channels that Canal+ supplies, in particular on the DStv platform, we understand it's not more than three. The upshot of that is that from a horizontal perspective, (the overlap) is very small because of the smallness of the content that Canal+ provides downstream,' said Moleya. According to the Competition Commission, the broader content market includes numerous global suppliers, indicating low risk of anti-competitive effects. Moreover, overlaps within the upstream advertising market, regarding the the sale of advertising slots on broadcast platforms and the downstream advertising market involving agencies such as Havas Media that purchase advertising on behalf of clients, were also determined to be less significant. In arriving at the determination, regulators adopted a 'worst-case scenario' to ensure all potential competition concerns were examined. The merger between MCG and Canal+ will be subject to a resutructuring exercise to ring-fence MultiChoice's licensed broadcasting entity, MultiChoice (Pty) Ltd. This unit will be hived off into a standalone company, LicenseCo, in line with local regulatory requirements. After settlement of the merger, the combined group will have no interest or control in LicenseCo. However, details of the this carve-out structure for LicenseCo remain confidential. LicenceCo will be majority-owned by previously disadvantaged and black economic empowerment companies, with MCG holding a 49% interest. Canal+ has, however, previously said that it was still engaging with Phuthuma Nathi, which has been earmarked to hold a 27% interest in LicenceCo, although the board has already given its support for the transaction. Black-owned and managed companies, Identity Partners Itai Consortium owned by Sipho Maseko And Sonja De Bruyn, and Afrifund Consortium have also been roped into LicenceCo, bringing 'highly experienced leaders' with 'great commercial and industry' knowledge. 'This seems a clever way to get around foreign ownership rules assuming they've had at least informal approval from Independent Communications Authority of SA (or discussions) and now deal can go ahead,' market analyst Simon Brown previously told Business Report. The CEO of Canal+, Maxime Saada, said earlier this year that the acquisition of MultiChoice was an 'opportunity to create a unique global media company, with a strong presence across Africa with the scale, expertise, and creativity to compete and partner with the largest players' within the media and entertainment sectors. BUSINESS REPORT
IOL News
23-04-2025
- Business
- IOL News
High gold prices may not boost South African producers amid cost pressures, warns Fitch
Overall, Fitch Solutions' outlook for SA's export sector is 'somewhat mixed' with 'softer growth in major trading partners such as the US and China (expected) to weigh' on demand. The mining sector is predicted to have muted growth despite gold prices breaching highest ever levels above $35 00 per ounce. Image: File Tawanda Karombo High costs could inhibit benefits of high gold prices for South African producers of the precious metal although there is optimism that its auto makers will register growth this year, analysts at Fitch Solutions said on Wednesday, highlighting a mixed outlook for exports this year. South Africa exports automobiles, metals and minerals as well as other manufactured products to markets such as Europe, China and the United States among others. With South Africa falling out with the US, analysts have been weighing up the impact of President Donald Trump's tariffs. Analysts at Fitch Solutions said on Wednesday that the US tariffs on South Africa would affect its agriculture and auto sectors the most. 'The country will face an effective tariff rate of 9.5% according to our calculations and this will likely impact sectors such as agriculture,' said Lara Wolfe, the head of Sub-Saharan Africa country risk for BMI, a Fitch Solutions company. The US tariffs on South Africa were likely to 'have an impact on the auto sector' although Fitch Solutions analysts were optimistic that the sector will register growth and recovery this year. This is premised on improving incomes on the domestic market. Easing interest rates and falling inflation elsewhere across the world could also translate to additional discretionary income for consumers. 'Our autos team have maintained their expectations of growth for the sector in 2025 after contracting in 2024 on the back of improving incomes,' added Wolfe. Overall, Fitch Solutions' outlook for South Africa's export sector was 'somewhat mixed' with 'softer growth in major trading partners such as the US and China (expected) to weigh' on demand. The mining sector was predicted to have muted growth despite gold prices breaching highest ever levels above $3 500 per ounce. 'Our metals and mining team remains bearish about the mining sector despite high gold prices. High costs and a limited product pipeline will continue to weigh on the sector,' explained Wolfe. In terms of household spending, the South African consumption outlook was likely to be characterised by slow inflation and accomodative monetary policy. This was all set to offer some relief to consumers and boost spending. Fitch Solutions reckoned that there was 'likely to be gradual recovery for the rand' while it has forecast average of 3.7% for inflation this year. FNB senior economist Koketso Mano said on Wednenesday though that inflation will resume 'a rising trend' from next month, the fuel price decline will continue to contain overall inflationary pressures. The South Africa Reserve Bank was now expected to cut interest rates by two sets of 25 basis points in the second half of the current year, said Fitch Solutions, citing its analysts downgraded expectations on the inflation forecast.
