By Nqobile Dludla JOHANNESBURG (Reuters) -South Africa's Competition Commission recommended France's Canal+ takeover of pay TV broadcaster MultiChoice Group be approved with conditions, clearing a
Canal+ Poised for Conditional Approval of MultiChoice Acquisition
By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa's Competition Commission recommended France's Canal+ takeover of pay TV broadcaster MultiChoice Group be approved with conditions, clearing a major hurdle on Wednesday.
If final approval is granted, the deal would be transformative for Canal+ as part of its expansion in Africa, particularly in English-speaking regions.
Canal+, which spun off from parent company Vivendi in December, made a firm offer last year of 125 rand in cash per MultiChoice share that it does not own, or about 35 billion rand ($1.96 billion).
The Commission said the transaction was unlikely to substantially lessen or prevent competition but recommended approval subject to a number of conditions given the role played by MultiChoice in South Africa's entertainment industry, and to address public interest concerns raised by various stakeholders.
By 0900 GMT, MultiChoice's shares were up 5.33%.
"This is a major step forward in our ambition to create a global media and entertainment company with Africa at its heart," Maxime Saada, CEO of Canal+ said.
The total value of all the public interest commitments by the merger parties was projected to be about 26 billion rand over the next three years, the Commission said.
The parties have agreed to not retrench any workers for three years and that the majority of LicenceCo's shareholders will be historically disadvantaged persons (HDPs) and workers. Moreover, the parties will continue certain corporate social responsibility initiatives such as skills development in the audiovisual industry and sports development, the Commission said.
In an effort to overcome regulations that prohibit foreign entities from owning more than 20% of a South African broadcasting licensee, MultiChoice Group carved out its domestic unit which holds its broadcasting licence into a new independent entity, called LicenceCo for now.
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.
The deal is now before the Competition Tribunal for final approval.
($1 = 17.8759 rand)
(Reporting by Nqobile Dludla, Editing by Louise Heavens and Elaine Hardcastle)
