Nigeria’s Central Bank bars banks, fintechs from international money transfer operations
As part of sweeping policy reforms aimed at improving liquidity in Nigeria’s FX market, the central bank (CBN) will no longer allow banks and fintech startups to carry out international money transfer operations. According to the new rules published on Wednesday, the bank also increased the application fees for International Money Transfer Operator (IMTO) approval to N10 million [$6,845]. The rules are a revision of earlier guidelines released in 2014. The new rules also set a minimum operating capital of $1 million for foreign IMTOs and its naira equivalent for their indigenous counterparts. Nigeria’s apex financial regulator had previously granted international money transfer licences to fintech companies including Flutterwave, LemFi, PagaTech, Flutterwave, VFD, and Interswitch among others. The revised guidelines didn’t state whether the existing licences would be revoked. The apex bank described the new rules as designed to “liberalise the foreign exchange market and ensure transparency.” It said that commercial banks will be allowed to act as agents for international money transfer services. In another circular, the CBN removed the cap on FX transactions, a rule enabling IMTOs to use the prevailing rate at the official market. The CBN has rolled out new rules this week to improve liquidity in Nigeria’s volatile FX market and boost diaspora remittances and foreign capital inflows. The bank ordered banks to limit their foreign exchange exposure and sell excess dollars after a steep drop in the official naira rate against the dollar. Despite a devaluation last year and a decision to float the Naira, the currency has witnessed even more volatility as the CBN tries to clear a backlog thought to be around $5 to $7 billion. To restore confidence, the CBN has been talking up its efforts to clear the backlog and promised to clear it early in the year. This week, the bank told Bloomberg again that the backlogs would be cleared “within a short time” and “fundamental issues that have hindered the effective operation of the Nigerian foreign-exchange markets” would be resolved.
Read MoreMusk’s Starlink stranded: Botswana rejects satellite internet application
With a planned launch date of Q4 2024, Starlink has had its application to launch in Botswana rejected Starlink’s dream of reaching every corner of Earth has encountered a roadblock in Botswana. The low-orbit satellite service, owned by Elon Musk’s SpaceX, was denied its application to operate in the African nation ahead of a planned Q4 2024 launch. While Starlink submitted its application to launch in May 2023, the regulator found that the company did not share all the necessary information. It is unclear which information Starlink did not provide in its original application. “There were issues regarding missing requirements with the application, which were identified and pointed out,” said a source at Botswana’s Communication Authority. ”They are yet to respond to the issues.” To operate in Botswana, applicants like Starlink must pay an application fee of P5,600, an annual license fee of up to P386,000 (~$28,500), and 3% of annual operating revenue. Starlink continues to face regulatory pushback in Southern Africa. The South African government rejected its application for failing comply with a mandatory requirement of 30% ownership to historically disadvantaged people. In Zimbabwe, legislators based their rejection of Starlink’s application on an EU investigation into X, the Musk-owned social media platform. However, Starlink is licensed in Zambia, Eswatini, Mozambique and Malawi.
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👨🏿🚀TechCabal Daily – Canal + MultiChoice
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Cheers to surviving another week of work emails, meetings and existential dread. Enjoy your 48 hours of freedom before we do it all again next week! In today’s edition Kippa’s co-founder skips away Airtel Africa reports 99% profit plunge Nigeria scraps exchange rate for IMTOs Canal+ eyes MultiChoice acquisition Funding tracker The World Wide Web3 Events Startups Duke Ekezie departs Kippa and embarks on a new venture Duke Ekezie Duke Ekezie, co-founder of Kippa, the Nigerian fintech startup, has taken a surprising turn out of Kippa and into a new venture, even as the company embarks on a bold pivot to edtech. Here’s what you need to know: Founded in 2021 by Duke, his brother Kennedy Ekezie, and Uche Jepthat, Kippa was initially a bookkeeping startup that freed entrepreneurs from the drudgery of spreadsheets. In September 2022, Kippa secured a super agent banking licence and then launched its agency banking product—Kippa Pay— which was overseen by Duke. Jepthat left the company in November 2022, shortly after Kippa announced an $8.4 million funding round. In October 2023, due to fierce competition and unprofitability, Kippa discontinued Kippa Pay and laid off 40 employees. In December, Kippa transferred the operations of Kippa Pay to Gpay, a payment subsidiary of Bloc, a Nigerian fintech about to launch banking services. Kippa also struggled to make severance payments to its laid-off employees after it suffered a ₦30 million ($33,516) internal fraud, discovered a month after it shut down Kippa Pay. Knowing when to persevere and when to pivot. On Wednesday, Kippa reportedly pivoted into providing edtech services. One day after the bold new chapter, Duke has decided to step down. While rumours of his departure swirled for months, Duke confirmed his exit and revealed he’s pursuing a new, undisclosed venture. He remains a shareholder and advisor in the company. Moving forward: According to Duke, after closing the agency banking business, he and Kennedy revisited their strategy and identified two key problems during discussions with SMEs and large businesses. Duke mentioned, “One aligned with my goals, and the other with Kennedy’s, so we’ve decided to solve them individually.” He declined to share specifics of the problem he’s looking to solve with his new venture. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Telecom Airtel Africa reports a 99% plunge in profits in 2023 Last year, Airtel Africa, a telecom company operating across 14 African countries faced headwinds from Nigeria’s naira devaluation and reported a loss after tax of $151 million in its Q1—April 1 to June 30, 2023 results. It seems 2023 continued to prove turbulent for the telecom giant as the company recently released its 9-month financial report ending December 2023, of a profit before tax of $2 million—a significant decline from the $523 million profit it recorded in the same period in 2022. Currency devaluation’s sting: Airtel witnessed a significant drop in profits last year due to the decrease in the value of currencies in some of its main markets: Nigeria, Malawi, Zambia, and Kenya. Without these currency impacts, the profit before tax for the nine months ending December 2023 would have been $840 million. The company experienced a 99% decline in profits, mainly due to the devaluation of Nigeria’s naira which cost Airtel $301 million. The country’s apex bank recently injected $500 million to address a lingering FX backlog, as the naira reached ₦1,421 per dollar on the official market this week. Challenges beyond profits: Overall revenue dropped by 1.4% to $3.8 million from $3.9 million in 2022. Despite these external pressures, Airtel Africa boasts a 9.1% growth in its customer base, reaching 151.2 million. This growth was fuelled by a 22.4% surge in data subscribers and a 19.5% increase in mobile money users. Undeterred by the profit decline, Group CEO Olusegun Ogunsanya says it won’t impact their growth plans. The company plans to focus on capital allocation priorities, repay debts, and invest in new opportunities like their recently launched data centre business, Nxtra by Airtel. Airtel Africa’s board also intends to return value to shareholders through a share buy-back programme of up to $100 million starting in early March 2024 over 12 months. Banking CBN scraps exchange cap for IMTOs Nigeria’s apex bank is taking a gamble to resuscitate its ailing currency. The news: The Central Bank of Nigeria (CBN) yesterday eliminated the cap on exchange rates quoted by International Money Transfer Operators (IMTOs). What does that mean? CBN previously controlled the exchange rate at which International Money Transfer Operators (IMTOs) like Western Union and MoneyGram could sell foreign currency to Nigerians. Now, these companies can set their own rates within a certain range. The CBN previously allowed the IMTOs to deviate from the official rate by a maximum of 2.5% (-2.5% to +2.5%). Per local media, the new development is in response to suspected hoarding of foreign currency by Nigerian commercial banks. The FG earlier gave a directive to commercial banks to release non-essential foreign currencies—currencies not needed for legitimate import payments, overseas travel allowances, or student tuition fees—to tame the naira’s depreciation against the dollar. Why is the FG doing this? The latest development represents the government’s attempt to resuscitate its ailing currency. The naira has suffered its worst devaluation in recent times, depreciating over 40% against the dollar since June, when the Central Bank adopted a more relaxed exchange rate policy By allowing IMTOs set their own rates, the move could bring about increased competition, leading to lower exchange rates for Nigerians receiving money from abroad. This policy change could also incentivise IMTOs to bring in their foreign exchange holdings to Nigeria, potentially boosting domestic forex inflows. Zoom out: The CBN’s move to scrap the IMTO exchange cap, while aiming for stability, could bring unintended consequences. Cheaper transfers might come at the cost of
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How to easily subscribe for MTN CUG in 2024
MTN is one of the networks in Nigeria with massive coverage and premium voice call quality. As such, it’s little wonder many Nigerians fancy the network especially for their Close User Group (CUG) services. MTN CUG provides an excellent opportunity for businesses and individuals to enjoy unlimited free calls and SMS within a closed user group. In this guide, we’ll explore two primary methods of subscription and walk you through the steps to activate MTN CUG in 2024 for an enhanced communication experience. 1. Subscribing at MTN offices nationwide The first option involves visiting any MTN office nationwide. However, it’s essential to note that this option is tailored for businesses with a significant number of lines. Comprehensive documentation is required, making it suitable for established companies looking to leverage MTN CUG for seamless communication in 2024 and beyond. 2. Use Samic for online and flexible MTN CUG subscription The first option may appear pretty bureaucratic. The second option introduces Samic, a platform that democratises the MTN CUG subscription, catering to both small-scale and large-scale users. Simply follow these steps to subscribe: Step 1: Register on the Samic website Visit the official Samic website, register, and activate your account. You’ll need to link your BVN to the account in compliance with the CBN directive for platforms requiring virtual/wallet deposits. Step 2: Add MTN Numbers for CUG Click MTN CUG under the menu which you’ll find on the top left corner. Then click on “Manage CUG numbers/ Activation. Businesses can add staff members, and individuals can include family or loved ones with MTN lines and correct NIN details. Also, note that you’ll need to add the numbers one after the other. Step 3: Fill in the required details For each line, you’ll need to provide the name of the owner, upload a valid Identity document, their NIN, a generated VNIN, and other necessary details for the CUG registration. For each line, there’s a first-time activation cost of ₦500. Also, to subscribe to the MTN CUG service, a minimum duration of three months is required for each line, with a monthly charge of ₦1000. So for instance, if a couple (husband and wife) subscribes, the total cost for both lines would be ₦6000, granting unlimited calls and texts for three months. Step 4: Fund your wallet There are about 3 options to fund your account. The first is via a virtual bank account likely to be a Wema bank account automatically created for your Samic transactions. You can fund your account with as low as ₦100, using this option. The other two options for funding your Samic wallet are Card and Bank Transfer. However, the least you can fund your wallet with, using these channels, is ₦1000. Additionally, when funding your Samic wallet for MTN CUG or any other Samic services, users are advised to add a small amount to cover for deposit charges. You can add between 100-200 naira to the amount you’re planning to use to carry out a transaction. The charges won’t be up to that but you can add for future purposes too. For example, if you want to pay for a service worth ₦6000, you may just deposit ₦6100. Step 5: Submit lines Once you have submitted the details for the MTN number(s) you want to add to the CUG subscription, click the “submit entry”, and you’re done. Subsequently, on each line you registered, there’ll be an SMS confirming the lines’ CUG activation and subscription. You can actively follow up on your activation via the official Samic CUG customer care line via WhatsApp on +234 708 734 9911. You can also reach them via call or WhatsApp on +234 706 318 8981. Important notes on MTN CUG 2024 Things to note when registering for MTN CUG with the Samic option. Name consistency Ensure that the name filled for each line matches the name used to register the line. Verify that the submitted NIN and ID card bear the same name. Accepted ID Cards Only the following ID cards are accepted for your MTN CUG registration: NIN slip/NIMC card Driver’s license Voter’s card International passport Debt-Free SIMs Make sure that the lines submitted for CUG activation are not owing MTN until CUG is activated on them. Subscription renewal Subscribers are advised to renew their MTN CUG subscriptions promptly for uninterrupted services. Non-renewal of CUG subscription after the 3-month subscription period will not stop your line from working normally. After one month of non-renewal, a reconnection token, in addition to the regular subscription fee, is required to continue using the CUG service. If you won’t be needing the CUG service for a long time, request via the SAMIC contact line for a CUG deactivation. Whenever you’re ready again, you request for a reactivation. General SIM usage Throughout the subscription period, subscribers can use their SIM cards as usual. Regular activities such as recharging, making calls, browsing and communicating with any network are not restricted for any reason. Subscription limitations apply only to the CUG subscribed lines, not affecting the normal functioning of the SIM card for other purposes. Additional benefits apart from MTN CUG on the Samic website Apart from the MTN CUG, subscribers can purchase airtime, data, and various services like Cable TV, and exam result checkers, at discounted rates. You also get bonuses and opportunities for earning are available, enhancing the value of being an MTN CUG 2024 subscriber. Final thoughts on MTN CUG subscription 2024 Whether you opt for the traditional MTN office subscription or the convenient Samic platform, MTN CUG offers an innovative solution for enhanced communication, making it an excellent choice for businesses and individuals alike.
Read MoreExclusive: Kippa Cofounder Duke Ekezie exits after agency banking shutdown, embarks on new venture
Duke Ekezie, the co-founder and President of Kippa, the fintech startup backed by Target Global, left the company after Kippa Pay, the agency banking product he was in charge of, was shut down. Duke had been absent on the company’s Slack channel for months, two ex-employees said. When TechCabal requested comments in December 2023, Duke said he could not “confirm or deny his exit.” The Kippa cofounder has now confirmed his exit from the company and has begun working on a different venture he declined to share specifics. “I am still very involved in Kippa as I have been providing advisory services to [Kennedy] who is first my brother before my co-founder,” Duke told TechCabal on a call. He remains a shareholder and co-founder in Kippa even though he is currently working on a different business. He also declined to comment on the 2022 exit of Uche Jepthat, the CTO and third cofounder. [ad] Uche Jepthat left Kippa in November 2022—two months after the startup announced that it had raised $8.2 million in a second round of funding, per his LinkedIn profile. He has co-founded another business— Earna, which offers benefits and wellness plans to employees. Moving on from agency banking and Kippa “In the last quarter of 2023, after [Kennedy and I] decided to exit the agency banking business due to its unprofitability, I handed over the day-to-day operations of Kippa to [Kennedy], ” said Duke. Duke coordinated the company’s growth, marketing and strategy teams and led Kippa Pay, the now-divested agency banking business, said two persons who worked with him at the time. In October, the Kippa Pay business was shut down, and 40 employees who worked on the product were laid off. After closing the agency banking business, Duke and Kennedy Ekezie returned to the drawing board. “We went back to talk to SMEs and large businesses to see what problems they had that we could solve. Two problems stood out for us.” “One of the problems aligned with my long-term goals and ambitions, and the other aligned with Kennedy’s. So we have decided to solve these problems individually,” Duke told TechCabal. He declined to share specifics of the problem he’s looking to solve with his new venture. Kippa’s pivot to edtech On Wednesday, TechCabal exclusively reported that Kippa is pivoting to edtech with an AI-powered platform that creates courses and teaches them to learners via messaging apps. It’s a creative pivot, considering where the business began. Two years before starting Kippa, Kennedy and Duke spent a year in Beijing supporting TikTok’s expansion into Africa. Alongside Jephthah Uche, they launched the finance management platform in June 2021 after traveling to Lagos, Uyo, Owerri, and Aba—Nigeria’s bustling commercial centers—to meet small businesses and learn what problems they could solve for them. Upon learning that manual reconciliation of business transactions was a major pain point for these businesses, they came up with an app that automates accounting processes and called it Kippa— possibly a wordplay on the word “bookkeeper.” They eventually raised about $11.6 million across two rounds from VC firms like Goodwater Capital, Target Global, TEN13 VC, Rocketship VC, Saison Capital, Crestone VC, VentureSouq, Horizon Partners and Vibe Capital, Entrée Capital, Alter Global and Rally Cap Venture. Angel investors across those rounds included Babs Ogundeyi, Kuda CEO; Sriram Krishnan, an investor in Khatabook; Raffael Johnen, Auxmoney CEO; Chris Bouwer; Kyane Kassiri; Edward Suh of Goodwater Capital; and Sajid Rahman also funded the startup.
Read MoreAirtel Africa’s profits plunge 99% on the back of currency devaluation in Nigeria and Malawi
Airtel Africa, a telecommunications firm with a presence in 14 African countries, reported a 99% decline in profits last year after currency devaluation in some of its biggest markets, including Nigeria, Malawi, Zambia, and Kenya. Massive devaluations of Nigeria’s Naira and the Malawian Kwacha squeezed Airtel Africa’s margins and resulted in profits of $2 million for the year. The Naira’s devaluation cost Airtel $301 million. Excluding these impacts, profit before tax for the nine months ended 31 December 2023 would have been $840 million. The telco’s $2 million profit is far from the $523 million profit it recorded in the nine months ended December 2022. The poor results also dragged down Airtel’s revenue by 1.4% to $3.8 million from $3.9 million a year ago. The company’s Group Chief Executive Officer, Olusegun Ogunsanya, is undeterred by the results. “Whilst further currency devaluation, particularly in Nigeria, has weighed on our reported financial performance, it will not affect the execution of our growth plans,” he said. Ogunsanya said the group will focus on capital allocation priorities, enabling the firm to fully repay HoldCo debt when due in May 2024, ensuring the continued success of their balance sheet de-risking strategy. The GCEO also said they would invest in new business opportunities like their new data centre business, Nxtra by Airtel, which was launched in December. The board intends to launch a share buy-back programme of up to $ 100 million, starting early March 2024 over 12 months. The telco’s financial statement also reported that its group mobile services revenue grew by 18.6%, driven by voice revenue growth of 11.2% and data revenue growth of 28.5%. Mobile money revenue grew by 31.8% in constant currency. Similarly, its total customer base grew by 9.1% to 151.2 million as the penetration of mobile data and mobile money services continued to rise, driving a 22.4% increase in data customers to 62.7 million and a 19.5% increase in mobile money customers to 34.3 million.
Read MoreMultiChoice will invest a further $89 million in Showmax by March
Pan-African broadcaster MultiChoice has announced that it will make a further $89 million investment into streaming platform Showmax by 31 March 2024. MultiChoice, the pay-TV giant that is the subject of an acquisition bid by Canal+, will invest $89 million into the revamped Showmax by March 31, 2024 according to a statement the company shared with the Johannesburg Stock Exchange. The investment will be part of a $129 million investment by MultiChoice and NBCUniversal which owns a 30% stake in Showmax. So far the two parties have invested $20 million into the streaming platform. “Equity funding is provided monthly or at other intervals, depending on [Showmax’s] then current working capital requirements and as may be determined by the board of [Showmax] for budget purposes, subject to a maximum capped amount,” MultiChoice said in a statement to the Johannesburg Stock Exchange. The first tranche of the investment, $30 million, will be made tomorrow, February 2. MultiChoice is positioning Showmax to be Africa’s premier streaming service and will relaunch the service later this month after a bunch of partnerships to increase its already large content library and improve the underlying technology. Some of its planned offerings include an English Premier League-only package, data-saving streaming bundles as well as content from NBCUniversal’s subsidiaries including SKY and HBO. The pay-TV giant hopes these changes will help it achieve the goals of 50 million subscribers and $1 billion in revenue in five years, trading profit breakeven by 2027, a 25% EBITDA margin, and 20% free cash flow margins, both at scale. Additionally, Multichoice has bumped up its growth expectations of the platform by a multiple of three by 2032 and content production by a multiple of 10 by 2033.
Read MoreExclusive: Africa’s Blockchain pioneer Zone will launch remittance product in 2025
Zone, Africa’s first licenced blockchain payment infrastructure company, will launch a remittance product in 2025, Obi Emetarom, the company’s CEO, told TechCabal this week. “Work is actively going on” to develop the product, Emetarom added. Zone plans to address the three critical pain points remittance providers, and International Money Transfer Operators (IMTOs) face: distribution, liquidity, and licensing. Remittance startups need robust distribution networks to deliver funds to recipients, even without direct connections to the local banks. They also struggle with managing liquidity in different local currencies, which can be expensive. The third hurdle is navigating the complex licensing requirements across different jurisdictions. “We want to deliver these services. The integration is possible because we are a switch and already connected to banks. Secondly, liquidity is possible because our settlement is instant,” Emeratom said. “And in terms of licensing, we already have a switching license, and our roadmap is to ensure that we have all the licenses that we need to operate in different markets.” In December 2023, Nigeria’s Central Bank reversed a two-year ban on crypto-related bank accounts and later released stringent rules for banks opening crypto accounts. At least two crypto startups have applied for licences from the country’s capital markets regulator, the Security Exchange Commission (SEC). Emeratom describes this as a “fantastic development” that will open up opportunities in cross-border payments. Canal+ tests the waters with a bid to buy MultiChoice Beyond its current role as a payments processor and switch, Zone has ambitious plans to reshape the financial landscape. The company envisions a future defined by regulated decentralized finance (DeFi), combining the strengths of blockchain technology and the legitimacy of traditional finance. “We’re working on a white paper to design what that future will look like. We are also building Zone to become the foundation for that future,” he said. Founded in 2008 by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi, Zone (formerly Appzone) rebranded from a fintech software provider to a blockchain payment infrastructure company in 2022. The transition saw the company split into two entities: Appzone’s cloud-based Software-as-a-Service (SaaS) platform rebranded into Qore, while Zone remained the blockchain-based payment gateway. Zone, licenced by the Central Bank of Nigeria as a payments switch, runs a blockchain network that enables direct transaction flow between financial service providers without an intermediary. Thirteen Nigerian banks use Zone’s blockchain network to process ATM transactions. Zone earns a fee for every transaction processed through its channels, and in 2023, the startup claimed it processed $1 million daily, but Emeratom says “the number has gone up,” though he declined to share specific figures. The startup plans to roll out more use cases for its blockchain payments technology, including online payments and direct debit. “The ATM was just to showcase the technology. The big deal for us is that we have been able to get in as a new payments infrastructure, and now we can move to higher value channels.” Zone will also launch Zone 2.0, a new blockchain infrastructure built on the Ethereum standard, allowing instant settlements for financial institutions. The startup has plans to launch in the Global South markets, particularly Latin America, Southeast Asia, and the Middle East.
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Only Four African Countries Secured>$100m Funding In 2023 + Stark Decline Realities
The curtains may have closed on 2023, but the African tech landscape is still adjusting to the aftershocks of a watershed year that tested the resilience and adaptability of startups across the continent. To make sense of it all, TechCabal Insights has released its retrospective State of Tech in Africa Report for Q4. Its analysis is comprehensive and delves into the critical aspects that shaped the ecosystem while offering actionable insights for the journey ahead.Our report is divided into five key sections. The funding winter unmasks the realities of doing business in Africa. Simply put, 2023 was a difficult year for African startups, with only four countries raising above $100 million in funding. By comparison, eight African countries raised above that figure in 2022. Venture Capital (VC) experienced a funding decline of 40.2% compared to 2022, forcing innovative entrepreneurs to explore alternative avenues. However, fintech stood strong, maintaining its status as the most funded sector despite a 79% dip in funding. Weathering the storm explores the strategies for growth and adaptation. One silver lining was the utility of mergers and acquisitions as a startup lifeline, which will remain a mainstay in 2024. For all the challenges faced, 2023 still recorded the single largest acquisition deal in the history of African tech, with fintech, once again, being the pacesetter. The report also examined multimarket models and pivots, highlighting notable examples that can serve as a compass for investors needing a strategic shift. Regulation and policy look at the regulatory framework shaping African tech as policymakers and innovators thread carefully between navigating the digital frontier and staying compliant, in line with best practices. It covers regulation around digital identity, financial inclusion, cryptocurrency, open banking, anti-competition and data protection. For our two-part survey, we collated primary data to provide a nuanced understanding of the impact of tech layoffs on the workforce and a founders’ outlook for 2024, offering a real-time pulse on the sentiments within the tech community. Lastly, we provide an outlook for the future. What does the uncharted terrain look like? Can bootstrapping take the place of VC funding? What imperatives lie ahead for founders, investors, and policymakers alike? Which trends from the past can serve as a prognosis for 2024? What multipolar forces will define Africa’s digital economy in the future? The answers to these and more can be found in our State of Tech Report Q4. Click this link to download it. We also value your feedback. Help us fill this brief survey to let us know how our reports can serve you better.
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Canal+ tests the waters with a bid to buy MultiChoice
Canal+, the French pay-TV giant owned by Vivendi SE, has made a non-binding offer to buy MultiChoice, per reports from Bloomberg and Tech Central, four years after it first bought a 6.5% stake in Africa’s biggest pay-TV company. Per Bloomberg, the offer from Canal+ is 105 Rands per share, a significant markup on MultiChoice’s current share price of 79 Rands. Canal+ increased its focus on Africa in the past decade and has grown from just 1 million African subscribers in 2016 to 7.6 million in 2023. In July 2019, it bought ROK Studios, a prolific Nigerian film production company, from IrokoTV to increase its slate of original content offerings. A timeline of Vivendi’s MultiChoice stake Canal+ has gradually increased its stake in MultiChoice since 2020 Buying MultiChoice will represent a grand step in Vivendi’s African ambitions if it can get the deal over the line. With Vivendi’s history of hostile takeovers, industry watchers had predicted it would attempt the same play with MultiChoice. In October 2015, Vivendi spent €180 million to acquire minority stakes in two publicly traded gaming companies, Gameloft (6.2%) and Ubisoft (6.6%), eventually buying a 10% stake in each company, a TechCabal report from 2020 said. A MultiChoice acquisition is perfect for Canal+ but regulatory hurdles loom It also made a hostile takeover of Gameloft by buying over 30% of the company before convincing other shareholders to sell their stakes. In June 2016, Gameloft became a Vivendi subsidiary. Since 2020, Canal+ has increased its stake in MultiChoice from 20.1% to around 32.6%. In 2022, Vivendi received $40m in dividends from Multichoice Group (up from $23.3m in 2021). Under South African law, Canal+ must make a mandatory takeover offer when its shareholding reaches 35%. But a complete takeover of MultiChoice may be impossible in the near future. Regulation pumps the brakes By law, Canal+, a foreign company, cannot have more than 20% of the voting rights on the board of directors of a South African broadcaster. MultiChoice enforces this rule through a voting rights cap. “A full takeover of MultiChoice looks unlikely to us,” said a Bloomberg intelligence analyst in February 2023.
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