Bell Canada, a subsidiary of
), has received a green signal from Canadian Radio-television and
Telecommunications Commission (CRTC) for Astral Media. The deal
will make BCE an undisputed leader in Canada's media space.
However, CRTC has imposed certain conditions like adhering to
the regulators' code of conduct for commercial agreement,
restricting anti-competitiveness and treating the independent
distributors and programmers fairly. Furthermore, the company has
to spend $72 million more than its proposed $246.9 million on
tangible benefits over seven years.
CRTC states that the deal positions Bell as a 22.6% owner of
the country's French TV market, boosting its competitive position
in the Quebecor-dominated market.
In Mar 2012, Bell took the first initiative to acquire Astral
by offering $3.38 billion. However, CRTC rejected the deal citing
that it would result in extreme dominance of Bell Canada in the
broadcasting sector. Bell also received tough opposition from
Rogers Communications Inc.
), which wanted the divesture of The Movie Network as a condition
for approving the deal.
In Nov 2012, Bell submitted a renewed bid that focused on
addressing the regulatory concerns of CRTC. Additionally, in Mar
2013, Bell decided to sell Astral's stake in 11 speciality
channels and 10 English language radio stations to ease the
monopolistic condition within the Canadian broadcast market.
Post the deal, Bell Canada will have 84 radio and 25
television stations, including the very popular The Movie Network
and French language pay-TV service, Ecran. Acquiring Astral will
increase Bell's share in the English-language market to 35.8%.
Astral will also provide Bell Canada with vast content that will
make it more competitive against online streaming companies like
We believe apart from enhancing Bell's presence in Quebec, the
deal will provide Bell's customers with various programming
options. On the flip side, the deal will reduce the carrier
choices for the customers and could eventually face monthly fee
Currently, BCE Inc. carries a Zacks Rank #3 (Hold). Another
stock to consider in the Canadian broadcasting industry is
), which carries a Zacks Rank #2 (Buy).
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