In a major development following Canal+‘s acquisition of MultiChoice Group, Maxime Saada, Chief Executive Officer (CEO) of the French media giant, has outlined a clear vision for the future of MultiChoice’s prominent brands, including DStv and Showmax.
Mr Saada emphasized the importance of maintaining these established brands, stating, “They are very strong brands. What would you do? You know, I would definitely not change the brands.” He acknowledged the global appeal of single-brand competitors like Netflix and Apple, but stressed the value of DStv and Showmax’s brand recognition in their markets.
This strategy aligns with the endorsement received from MultiChoice’s board during a press conference in Cape Town. The companies have also jointly announced a formal offer from Canal+ to acquire the remaining shares in MultiChoice at R125 ($10.67) per share (based on today’s exchange rate), signifying a significant step forward in the takeover process overseen by the Takeover Regulation Panel (TRP).
While discussing brand strategy, Mr Saada highlighted the contrasting operational approaches of the two companies. Canal+ focuses primarily on content distribution, while MultiChoice has diversified into home security, fintech, insurance, and betting. Saada acknowledged the potential of MultiChoice’s broader strategy, but expressed some reservations.
To solidify its position within MultiChoice, Canal+ has steadily increased its ownership stake from 35% to 40.8% through open-market purchases. A full acquisition would require an investment exceeding R30 billion ($2.5 billion). Importantly, surpassing 50% ownership would trigger scrutiny from the Competition Commission due to potential market dominance concerns.
MultiChoice has addressed shareholder anxieties regarding exceeding the 50% threshold. The company clarified that such a scenario wouldn’t necessitate a formal merger review, as ownership above 50% would constitute a merger under the Competition Act, requiring prior approval from the Competition Tribunal. MultiChoice expects Canal+ to maintain its ownership below this critical level.