The Competition Commission has recommended that the Competition Tribunal approve the proposed acquisition by Canal+ of MultiChoice subject to conditions. MultiChoice said on Wednesday that conditions include a package of guaranteed public-interest commitments proposed by the parties. The package supports the participation of firms controlled by historically disadvantaged persons and small, micro and medium enterprises in the audiovisual industry in SA, MultiChoice said. This package will maintain funding for local general entertainment and sport content, providing local content creators with a strong foundation for future success. The transaction will now be considered by the Competition Tribunal. MutliChoice’s French suitor, Canal+, is offering R125 cash for the DStv operator’s shares.
Pressure and problems that have seen an exodus of customers and earnings cut at MultiChoice continue to haunt the pay-tv operator.
Africa’s largest pay-TV company, which has been subject of a takeover bid by French broadcaster Canal+, has spent the past year fighting headwinds that have battered the business.
Read also: Multichoice revenues plunge amidst loss of nearly 4m subscribers in 24 months
These range from a cost-of-living crisis that has seen households cut their entertainment budgets to those same inflationary pressures pushing up operating costs across its 50 markets including Nigeria, as well as shifting consumer preferences towards alternatives such as gaming and social media.
The company has gone from having more than 23-million subscribers to 19.3-million in less than two years.
DStv’s parent company said the situation had not improved.
“The group has continued to experience pressure, as household spending remained constrained by the ongoing cost-of-living crisis, compounded by elevated inflation and interest rates in many of its markets,” MultiChoice said in a voluntary operational update recently.
“This is likely to impact negatively on performance in financial year 2025. The group has returned to a positive equity position, but capital preservation remains a key consideration in the current environment.”
The voluntary update is probably intended to prepare investors for another tough set of financial results for the year to end-March.
At the half-year mark, MultiChoice said “unprecedented foreign-exchange volatility” combined with macroeconomic challenges sent its annual profit, or adjusted earnings per share, nosediving.
