MultiChoice Group CEO Calvo Mawela is preparing to take on the US streaming giant as the African TV company tries to push a roughly R55 billion deal with Vivendi’s Canal+ through regulators.
“A combination gives us a better chance to compete against the global giants,” Mawela said in an interview. “Scale matters in this industry. That way, you can negotiate and get better prices for content, and you get more revenue, especially when you have one provider in French-speaking Africa and one in English-speaking Africa.” Nigeria, in particular, has suffered a currency devaluation that has affected customers’ margins and purchasing power. The deal with France’s Canal+ will help the combined company gain scale and become more competitive in content and technology needed to compete with leading platforms such as Netflix and Amazon.com, Mawela said.
We are putting together something acceptable to regulators and discussions are ongoing.
While the two companies were in talks with South African regulators – local ownership rules could pose a serious regulatory obstacle to the deal – the French broadcaster continued to slowly increase its stake in MultiChoice.
“We put something together that should be acceptable for the regulators, and engagements are ongoing,” he said. “We believe it’s a good story for Africa.”
Africa’s young and fast-growing population makes it an attractive market for streamers, but the continent also suffers from unequal internet access, low incomes and currency fluctuations. The merger of Canal+ and MultiChoice would create a group with about 50 million subscribers and give it the wherewithal to invest more in local content and sports.
MultiChoice is already working with Canal+ on new productions, with the South African company known for its sports content offering partners access to English Premier League soccer matches, Mawela said. The company hopes to grow revenue from its Showmax service to $1 billion over the next five years, he said.
French billionaire Vincent Bolloré’s Vivendi is in the process of winding down his vast media and entertainment empire, while Canal+ is actively preparing for its own IPO in London, and the newly spun-off company could also have a secondary listing in Johannesburg.
