Canadian conglomerate strikes major media merger


Bell Canada holds 15% of key multimedia Canadian group CTV, worth $200M. It has a deal to acquire the remaining 85% for $1.3B, and with assumed debt added in, the total value of the deal balloons to $3.2B. The deal will bring CTV’s more conventional media powerhouse together with Bell’s forward-moving media platforms.

Bell President/CEO George Cope explained his company’s thinking. He said, “Acquiring CTV’s range of premier video content enhances Bell’s execution of our strategic imperatives by leveraging our significant broadband network investments, accelerating Bell’s video growth across all three screens – mobile, online and TV – and achieving a competitive cost structure. 100% ownership of CTV enables Bell to maximize strategic and operating synergies with CTV, including the efficiency of our content and advertising spend. Our industry is changing rapidly. Increasing vertical integration across the communications landscape, ongoing technological advancement and key regulatory developments introduce new opportunities with the ownership of high-demand content by Bell. Our acquisition of CTV more than levels the playing field in our increasingly competitive industry.”

CTV has in its portfolio 27 television stations and numerous “specialty” and online channels. It also owns and operates CHUM radio, with 34 stations spread throughout Canada.

The sellers providing Bell with the 85% stake in CTV include The Woodbridge Company Limited, the Toronto-based holding company of the Thomson family; Ontario Teachers Pension Plan; and Torstar Corporation.
The transaction is subject to approval from the Canadian Radio-television and Telecommunications Commission (CRTC) and the Competition Bureau. The companies are looking to close the deal by the middle of 2011.

Looking at the deal, the Toronto Star said a key was bringing CTV’s content to Bell’s online and mobile distribution platforms. And the newspaper raised the specter of Bell playing content access games with competitors such as cable giant Rogers Communications.

RBR-TVBR observation: Bell’s CEO says the acquisition “more than levels the playing field…” Others might wonder if it will “more than level” the competition. It will be interesting to see how Canada’s regulatory bodies look upon this major move toward vertical integration, particularly in the executive suites at Comcast and NBCU.