MultiChoice creates a new entity to finalise its CANAL+ deal
The aim is to help the company comply with South African laws that limit foreign ownership.
In recent years, MultiChoice has been under immense pressure. Once the dominant force in African pay-TV, the company has struggled to keep pace as global streaming platforms like Netflix, Amazon Prime Video, and Disney+ continue to eat into its subscriber base. With DStv Premium numbers falling and competition heating up, it was clear that something had to give.
After months of negotiations, regulatory hurdles, and back-and-forth with authorities, MultiChoice has finally taken the big step: it’s moving forward with its $2 billion sale to France’s CANAL+, but not without a significant structural shake-up.
To get the green light from South African regulators, MultiChoice has created a new entity called LicenceCo, which will house its South African broadcasting licences and customer contracts. This carve-out is designed to help the company comply with South African laws that limit foreign ownership in broadcasters to 20% voting rights. CANAL+, being a French company, can’t own more than that, at least not until proposed legislation (which may lift the cap to 49%) eventually passes, and that could take a while.
Kelechi Edeh
Under the new setup, LicenceCo will be independently run and majority-owned by Historically Disadvantaged Persons (HDPs), in line with the country’s black economic empowerment rules. Shareholders in the new entity include Phuthuma Nathi (a black empowerment investment vehicle already tied to MultiChoice), 13th Avenue Investments, Identity Partners' Itai Consortium, and the MultiChoice Workers Trust. Former Telkom CEO Sipho Maseko and businesswoman Sonja De Bruyn are among the names linked to the investment firms involved. MultiChoice will retain a 20% voting stake and a 49% economic interest in LicenceCo. The rest will be distributed across the new shareholders via a mix of ordinary and “notional vendor-funded” (NVF) shares. These give partial dividends until the full share value is paid off, after which they convert into ordinary shares. It’s a smart workaround that ticks all the regulatory boxes. At the same time, it allows MultiChoice to keep a foot in the door of its most important market while bringing in fresh capital and strengthening black ownership. As part of the agreement, MultiChoice will also pay out an extraordinary dividend of R1.375 billion (over $76 million), with Phuthuma Nathi set to receive over R343 million ($19 million). So, while the company is technically selling part of itself, it’s also ensuring it stays compliant, relevant, and ready to take on the next phase, one that’s increasingly being defined by streaming and scale.
Louis Eriakha
