Canal+ intends to retain MultiChoice’s brand identity after acquisition

In a comprehensive report, Maxime Saada, the chairman and chief executive officer of Canal+, the French media conglomerate, has delineated the strategic direction for MultiChoice post-acquisition. Saada has articulated a clear vision for the future of MultiChoice’s well-known brands, including DStv and Showmax. He underscored the intrinsic value of these brands, acknowledging their strong market presence and asserting that there are no current plans to rebrand them under the Canal+ umbrella.

Saada believes that the inherent strength and recognition of these brands are crucial assets that warrant preservation, barring any compelling reasons for change. Saada’s perspective is rooted in the understanding that while global competitors such as Netflix and Apple operate under a single brand, which may confer certain advantages, the established brand equity of DStv and Showmax should not be underestimated.

He stated, “What is true is that we’re only facing companies [like Netflix, Apple, etc.] that have one brand. And it makes them stronger. But if you ask me today, what would you do? You know, I would definitely not change the brands. They are very strong brands.”

The report further reveals that the board of MultiChoice has expressed its support for Canal+’s bid to assume control of the company. This endorsement was confirmed during a press engagement with journalists in Cape Town.

In a recent development, MultiChoice and Canal+ communicated to their shareholders through a joint statement, announcing Canal+’s formal offer to acquire the remaining shares of the South African broadcaster at a price of R125 per share. This announcement marks a significant progression in the takeover process, as overseen by the Takeover Regulation Panel (TRP).

In addition to discussing brand strategy, Saada also pointed out the distinct operational approaches of Canal+ and MultiChoice. He noted that Canal+ has a strategic concentration on content distribution, which is the core of its profitability. In contrast, MultiChoice has diversified its business model, branching out into various industries such as home security, fintech, insurance, and betting. This diversification reflects MultiChoice’s broader business strategy, which differs from Canal+’s more focused approach.

Canal+, which is known for offering a consistent content lineup across all its platforms, contrasts with MultiChoice’s approach of providing distinct streaming services, such as Showmax, each with its own brand identity. Despite these operational variances, Saada has recognized the potential validity of MultiChoice’s strategy, although he admits to harboring some uncertainties about its efficacy.

In a strategic move to solidify its presence within MultiChoice, Canal+ has incrementally increased its ownership stake from 35% to 40.8% by purchasing additional shares in the open market. To fully acquire the remaining shares of MultiChoice, Canal+ would be required to invest over R30 billion. This acquisition effort is significant because, should Canal+’s stake surpass the 50% mark, it would trigger scrutiny from the Competition Commission, as such a level of ownership could have substantial implications for market competition.

MultiChoice has addressed shareholders’ concerns regarding the possibility of Canal+ exceeding the 50% ownership threshold. The company clarified that it does not anticipate this scenario unfolding. According to MultiChoice, crossing the 50% ownership boundary would constitute a merger as per the Competition Act, necessitating prior authorization from the Competition Tribunal. Consequently, MultiChoice has conveyed its expectation that Canal+’s shareholding will remain below this critical juncture, thereby avoiding the complexities associated with a formal merger review process.