), a leading Canadian telecom operator, has received clearance
from Canada's Competition Bureau to complete its pending
acquisition of Astral Media for $3.38 billion (C$ 3.29). Canada's
anti trust agency cleared the deal under the condition that BCE
Inc owned Bell Canada should offload certain Pay-TV and radio
Initially in Mar 2012, Bell Canada took its first step to
acquire Astral for $3.38 billion, which would have made it an
undoubted leader in the French language channel in the country,
particularly in Quebec, where Astral owns 13 French language
channels. However, Canadian Radio-television and
Telecommunications Commission (CRTC) rejected the deal on Oct
2012, citing that it would result in concentration of too much
power in the hands of Bell Canada in the broadcasting sector.
In Nov 2012, the two companies submitted a renewed bid that
focused on addressing the regulatory concerns of CRCTC. The
closing date of the transaction was extended till Jun 2013.
Per the new agreement, Bell will retail eight of Astral's TV
channels including 6 French language channels and two English
language channels - The Movie Network and TMN Encore. As part of
the deal, Bell also needs to sell six of Astral's TV joint
ventures including the bilingual Teletoon and Cartoon Network
Canada to competitor Corus Entertainment Inc. that will make the
latter a dominant force in the children's TV space. Corus will
also acquire two of Astral's radio stations in Ottawa as part of
the divestiture requirement. The Corus transaction is valued at
$400.6 million and is also subject to regulatory approvals.
Additionally, Bell has also agreed to sell some of the popular
Astral Media TV channels and eight English language radio
channels through an auction process which is currently ongoing.
These additional divestitures signify that Bell is desperate to
close the deal, as it will place the company in a better position
in Quebec. At present, it lags far behind rival Quebecor Inc in
Following the acquisition, Bell media will have a 23.0% share
of the French language media market and 35.7% of the country's
English language market. The deal will increase Bell's presence
in Quebec where, the company currently holds just 8% of the
French language market.
We believe this deal is a welcome development for Bell prior
to the final approval from CRCTC, which if cleared will allow
Bell's customers significant programming benefit particularly in
Quebec. Nevertheless, the approval did not seem to have energized
the share holders of BCE as the stock leaped only 13 cents on the
Tuesday trade in Nasdaq.
Other Stocks to consider
Currently BCE Inc. Carries a Zacks Rank #3 (Hold). Some other
stocks to consider in the Canadian broadcasting industry are
). All the stock currently carries a Zacks Rank #2 (Hold).
BCE INC (BCE): Free Stock Analysis Report
CBS CORP (CBS): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis
ROGERS COMM CLB (RCI): Free Stock Analysis
To read this article on Zacks.com click here.