CRTC Approves BCE's $3.4 Billion Takeover of Astral Media
The regulator rejected an earlier bid for approval of the transaction, but agreed this time after the phone giant agreed to sell off assets and invest more coin in Canadian content.
KARLOVY VARY -- The second time appears to be lucky for Canadian phone giant BCE, as it secured regulatory approval Thursday, June 27, for its $3.38 billion takeover of Astral Media.
The CRTC gave a green light to the acquisition of the indie broadcaster after, in October 2012, rejecting an initial proposal to purchase Astral Media.
Canada’s TV regulator then rejected the Astral Media takeover on competition grounds, going so far as to say the deal was bad for Canadian consumers.
That was then. On Thursday, the CRTC said the takeover of Astral Media, as modified, was in the “public interest.” It helps that the phone giant chipped in an extra $72 million in "tangible benefits," to be invested in Canadian content production to sway the regulator this time around.
BCE will also need to sell Astral TV channels like The Family Channel, Teletoon Retro, Disney XD, Disney Junior, Cartoon Network, Historia, Séries+, MusiquePlus and MusiMax.
Some of those assets are already covered under an earlier-agreed sales transaction with rival Corus Entertainment.
No mention is made of a forced sale of The Movie Network, a pay TV service, which could have signaled a deal breaker for BCE.
If the sale now goes ahead, BCE and its Bell Media division will end up with a 35.8 percent share of the English-language market, which falls within the 35 percent to 45 percent market threshold urged by the CRTC.
And the Bell-Astral entity will have a 22.6 percent share of the French-language market, well below the 35 percent threshold.
“The CRTC's decision builds on the Competition Bureau's assessment and includes specific measures to attenuate concerns related to competition, ownership concentration in the television and radio markets, vertical integration and the exercise of market power in the communications system,” the regulator said in its decision.
BCE and Astral, during the latest round of regulatory hearings, went so far as to ease earlier concerns from the CRTC over its takeover to ensure its own private interest was balanced by the public interest.
“As a result, the commission has put in place further measures to address potential anti-competitive behavior, to maintain a dynamic marketplace and to ensure Canadian listeners and viewers will continue to have access to a diversity of voices in the market,” the regulator added in its decision.
BCE must also sell off a string of Astral Media radio stations but, significantly, will be able to operate four stations in Montreal.