MultiChoice, led by Calvo Mawela, seems steadfast in transforming the satellite TV service into a tech-centric company. However, this strategy may not align with the intentions of its suitor, Canal+.
The French media giant has offered R125 in cash for every MultiChoice share it does not already own and has invested nearly €1.2bn for a 45.2% stake in the company.
Maxime Saada, chair and CEO of Canal+, has remarked: “Almost one of the only differences” between Canal+ and MultiChoice is the latter’s “belief in diversification”.
In a recent meeting with journalists in Johannesburg, Saada emphasised Canal+’s focus on content distribution as its core business. When asked if Canal+ would divest MultiChoice’s noncore businesses, Saada indicated it was too early to decide until due diligence was completed.
Meanwhile, MultiChoice continues to advance its strategy to develop its platform beyond pure video entertainment. On Tuesday, it announced plans to sell a 60% stake in its insurance business, NMS Insurance Services (NMSIS), to Sanlam Life for R1.2bn, with a potential performance-based earn-out of up to R1.5bn by December 2026.
This deal includes a long-term commercial arrangement to expand insurance offerings to MultiChoice’s 21-million household subscriber base across 50 African countries. Sanlam will manage NMSIS operations through its Sanlam Fintech cluster.
In February, MultiChoice sold a 30% stake in its video-on-demand platform, Showmax, to US-based Comcast, which helped to develop the new Showmax platform. This move, in particular, raises questions such as: will Canal+ buy Comcast’s stake in Showmax or collaborate with it?
Saada noted that Canal+ had yet to conduct due diligence and did not know the terms of the Comcast deal, making it difficult to judge its effect on MultiChoice.
MultiChoice’s partnership with Comcast could pose a challenge for Canal+ as the US-based broadcaster also aims to expand in Africa.
If the MultiChoice-Canal+ deal goes ahead, we can expect fireworks between the French media giant and the US company over ownership of Showmax.
Furthermore, MultiChoice’s ventures into betting, an area Canal+ disapproves of, add another layer of complexity. In January, MultiChoice partnered with KingMakers to launch SuperSportBet, a betting platform for sports fans in SA.
MultiChoice has also diversified into fintech. Last year, it unveiled Moment, a joint venture with Rapyd and General Catalyst, consolidating the $3.5bn in payments it processes annually through 200 payment partner integrations.
Additionally, it provides on-demand emergency services through Namola and AURA and broadband services via DStv Fibre and DStv Internet.
The future of these ventures under Canal+ ownership seems uncertain. Should Canal+ decide to divest these businesses, local tech firms might benefit from opportunities to acquire these assets.
Indications are that integrating MultiChoice’s diverse business portfolio with Canal+’s focused strategy will be challenging, particularly given existing strategic partnerships and the new ventures it has established.
The compatibility of these strategies remains in question, and the outcome will depend on Canal+’s approach to managing and possibly restructuring MultiChoice’s diverse portfolio.
For now, Canal+ is focused on its binding offer to MultiChoice’s institutional shareholders. If these shareholders accept the offer, the French media group will have to contend with SA’s regulatory bodies, which pose a significant hurdle regarding limits on foreign ownership of MultiChoice.
However, Saada is confident his plan will persuade SA regulators to approve the proposed deal.
One thing is certain: Canal+ has a challenging task ahead in managing MultiChoice’s diversification efforts to transform the group into a valuable tech business offering a range of consumer services. However, the partnership between MultiChoice and Comcast might prove to be the biggest headache for the French company if it manages to take full control.
• Lourie is founder and editor of TechFinancials.
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