Canal+'s Strategic Move to Acquire Showmax: Unlocking Valuation Upside in a Consolidating Streaming Landscape

The global streaming wars have entered a new phase in 2025, marked by aggressive consolidation and the pursuit of cross-border synergies. As Canal+ weighs its acquisition of Comcast's 30% stake in Showmax, the move represents more than a bid for full ownership-it signals a calculated play to capitalize on Africa's burgeoning digital entertainment market while leveraging European operational expertise. With Showmax already generating 22% year-on-year revenue growth and ambitious EBITDA targets, the investment rationale hinges on aligning with industry-wide trends and unlocking untapped value through strategic integration.

Industry Trends: Consolidation and the Rise of FAST

The streaming sector in 2025 is defined by two dominant forces: consolidation and the proliferation of Free Ad-Supported Streaming Television (FAST) platforms. As larger players absorb smaller competitors to reduce costs and expand reach, the proposed $8 billion merger between Paramount and Skydance Media exemplifies this trend, as detailed in an industry overview. Falling interest rates have further incentivized M&A activity, with companies prioritizing scale over fragmentation, according to Forbes predictions.

Simultaneously, the shift toward FAST channels is reshaping monetization strategies. By converting niche cable networks into ad-supported platforms, streaming services are catering to price-sensitive consumers while maintaining revenue streams, as Forbes notes. For Showmax, which operates in a market with diverse economic profiles, this model could bridge the gap between premium subscriptions and broader accessibility.

Showmax's Financials: Growth Amidst Losses

Despite trading losses of US $141 million in FY24, Showmax has demonstrated resilience. Its revenue surged to $53 million in FY24, with paying subscribers growing by 50% year-on-year, according to Showmax revenue figures. The platform's recent relaunch in February 2024-though costly-has yielded positive retention rates, with 88% of migrated users remaining active, the same report noted.

The company's long-term roadmap includes achieving 25% EBITDA margins and profitability by 2027, according to those figures. While these targets remain ambitious, they align with broader industry benchmarks. For instance, Bonheur ASA, a Norwegian firm in renewable energy, achieved a 19% EBITDA growth in Q3 2025 despite revenue declines, as shown in the Bonheur Q3 2025 slides, illustrating that operational efficiency can drive profitability even in capital-intensive sectors.

Cross-Border Synergies: Europe Meets Africa

Canal+'s acquisition of Showmax would create a unique cross-border synergy. Europe, with its mature streaming infrastructure, could provide Showmax with advanced content production and distribution capabilities, while Africa's youthful, tech-savvy population offers a growth engine for Canal+.

For example, localized African content could be co-produced with European studios, leveraging Canal+'s regional expertise to tap into global markets. Conversely, Showmax's agility in adapting to emerging markets could inform Canal+'s strategies in Asia, where it already has a presence. Such collaboration mirrors the success of Netflix's pan-African strategy, which prioritized regional storytelling to drive engagement, as noted on MarketScreener.

Valuation Upside: EBITDA Multiples and Strategic Leverage

Valuation metrics for streaming platforms in 2025 highlight the potential for upside. While Showmax's FY24 losses are significant, its revenue growth and EBITDA trajectory position it to benefit from industry-wide multiple expansions. For context, Ryde Group Ltd, a mobility tech firm, saw a 31% revenue increase in 1H2025 despite adjusted EBITDA deficits, according to a Ryde report, underscoring investor appetite for high-growth narratives.

If Canal+ can accelerate Showmax's path to 25% EBITDA margins, the platform could command a premium valuation. Assuming a 10x EBITDA multiple (typical for mid-stage streaming firms, as illustrated by Bonheur's results), Showmax's projected EBITDA of $132.5 million (25% of $530 million revenue) would imply a valuation of $1.325 billion-a stark contrast to its current implied value.

Shareholder Value Implications

Full ownership would allow Canal+ to consolidate Showmax's financials, accelerating debt repayment and reinvestment in high-margin content. Additionally, cross-subsidization between European and African operations could reduce overhead costs, a strategy proven effective by Disney's integration of its global streaming divisions, as discussed in the industry overview.

However, risks persist. Showmax's FY24 losses, attributed to its platform relaunch, highlight the need for disciplined capital allocation, as reported by Techweez. Canal+ must balance short-term burn with long-term value creation, ensuring that European operational rigor complements Showmax's growth ambitions.

Conclusion

Canal+'s potential acquisition of Comcast's stake in Showmax is a strategic masterstroke in a sector defined by consolidation and innovation. By aligning with industry trends, leveraging cross-border synergies, and targeting EBITDA efficiency, the move positions Canal+ to dominate both European and African streaming markets. For investors, the key question is not whether the deal makes sense-but how quickly Showmax can transform its losses into profits.