If approved in the coming weeks, Vivendi’s split from Canal+ will mark a promising new era for business in Africa. “Vivendi’s Supervisory Board has just approved the resolutions which will be submitted to shareholders during the Combined General Assembly of December 9, 2024 to approve the separation of Canal+, Havas and Louis Hachette Group.” This event will mark a pivotal stage for the development of the activities of these groups, particularly in Africa where Canal+ is a major player.
It must be said that Canal+ is experiencing strong expansion in Africa, reaching 7,587,000 subscribers in the first half of 2024, up +507,000 compared to the first half of 2023. For the next five years, the cable channel provider is counting on 11 million subscribers. subscribers by 2028. African countries, with the highest number of subscribers at the end of 2023, are mainly located in French-speaking Africa: Ivory Coast, Senegal, Mali, Ghana, Benin, Burkina Faso, Togo, Cameroon, Democratic Republic of Congo (DRC), and Tanzania. These countries represent the main markets for Canal+ in Africa, where it has established itself thanks to adapted content and an aggressive distribution strategy.
Impact of the split in Africa
The split should allow the encrypted channel broadcaster to better focus on its pay TV and content production activities, unlocking its growth potential. As indicated in the financial report and financial statements of the Vivendi group for the first half of 2024, “Canal+ will have the human resources, agility and financial resources necessary for its development.»
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In Africa, where the group already has 7.6 million subscribers, representing nearly 30% of its global base, this independence could prove crucial. “If the proposed demerger is approved, Canal+ will have the ability to allocate and optimize its capital structure independently to respond to its specific market dynamics», underlines the report.
After the split, Canal+ will be able to fully concentrate on its strategy of conquering the African market, which represents enormous growth potential. The group will be able to allocate more resources and efforts to expand its presence and strengthen its positions on the continent.
Note that the premium broadcaster has already started strategic investments in Africa, such as the entry into the capital of the Senegalese company Marodi TV. Added to this are significant stakes in two key players in the African audiovisual landscape: the South African MultiChoice of which it holds 200 million shares, representing 45.20% of the capital, and Viu (36.8%). These strategic participations will allow it to take advantage of the synergies, existing distribution networks and local expertise of these partners.
To appeal to the African market, Canal+ will have to offer content adapted to local preferences and cultures. The group could invest in the production of African content, such as series, films and entertainment programs, in collaboration with local partners.
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The subsidiary of the Vivendi group could also expand its service offerings in Africa, such as pay television, video streaming and video on demand (VOD) services. These services could be adapted to local contexts and offered at prices affordable to African consumers. And why not invest in strengthening distribution infrastructure, such as telecommunications networks, digital platforms and payment systems, in partnership with local players.
In addition to its holdings mentioned above, Canal+ could consider new acquisitions or strategic partnerships with other key players in the African market, in order to consolidate its presence and influence on the continent.
As indicated in the report mentioned above, “Canal+ will pursue its own strategic objectives, in particular through acquisitions and other growth opportunities. » This financial and strategic flexibility will be crucial to adapt to the specificities of different African markets and strengthen its presence.
Employment, local teams and governance
The separation should not lead to major changes for Canal+’s African teams. As specified in the announcement of the Combined General Meeting of December 9, 2024, “Canal+ will remain French tax resident and its operational teams will be maintained. » However, renewed governance, with a Supervisory Board composed of 12 members including 8 independent (66.7%), could instill a new dynamic favorable to development in Africa.
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After the split, Yannick Bolloré will remain Chairman of the Supervisory Board of Vivendi and Arnaud de Puyfontaine, Chairman of the Management Board. The composition of the Supervisory Board remains unchanged until the General Meeting approving the 2024 accounts, with 13 members including 6 independent. For Canal+ SA, Yannick Bolloré will be Chairman of the Supervisory Board and Maxime Saada, Chairman of the Management Board. The Supervisory Board will be composed of 12 members including 8 independent (66.7%).
By remaining a French tax resident, Canal+ will continue to benefit from the advantages and tax agreements linked to its presence in France. This could facilitate its operations and investments in Africa, while maintaining a solid base in France.
Maintaining Canal+’s existing operational teams will make it possible to preserve the expertise, knowledge and skills acquired over the years. This continuity will be valuable for carrying out the development strategy in Africa, while relying on the experience and know-how already in place.
The establishment of a 66.7% independent supervisory board could thus instill a new dynamic and a new strategic vision within it. This renewed governance, with a majority of independent members, could provide a fresh look and a valuable external perspective for the development of activities in Africa. Furthermore, this independence from particular interests could promote more transparent decision-making focused on growth opportunities on the continent.
African shareholding and promotion of African activities
According to the press release announcing Vivendi’s Combined General Meeting for December 9, 2024, Vivendi announces that it wants to list its future separate Canal+ subsidiary on the stock exchange, which could attract African investors interested in this activity, which is very present locally.
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“If the separation project is approved by the General Meeting, the first listing of the shares of the three companies (Canal+, Havas and Louis Hachette Group) will take place on December 16, allowing negotiations to be carried out on the stock exchange from that date “. Thus, the planned split and separate IPO of its various subsidiaries could represent an opportunity to attract new African investors. This could have a positive impact on the composition of African shareholders, thus strengthening their link with the group and its local roots.
Ultimately, this split should allow for better visibility and promotion of Canal+’s African activities. By being an independent and listed entity, the group will be able to better highlight its achievements and its specific strategy for the continent, thus attracting new investors.
As the financial report points out, “the Group has suffered a very high conglomerate discount since the distribution-listing of Universal Music Group (UMG) in 2021, significantly reducing its valuation.” The separation should correct this situation and reflect the fair value of the different activities, including those in Africa.
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