Shaw Receives Green Light to Acquire Canwest
Once takeover is completed, Shaw will gain control of Global Television network.
TORONTO -- Canadian cable giant Shaw Communications has a green light to acquire Canwest Global Communications Corp.’s TV assets out of bankruptcy protection, making it a major Canadian broadcaster.
Once the $2 billion takeover deal is completed, Shaw will take control of the Global Television network, whose primetime hits include Fox’s “Glee” and CBS’ “Survivor” franchise, and 13 lucrative cable channels acquired from Goldman Sachs & Co. for around $700 million.
"We are satisfied that this transaction will generate substantial benefits for the Canadian broadcasting system," Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission (CRTC), the country’s broadcast regulator, said Friday.
The blockbuster takeover of Canwest Global comes Shaw and rival North American cable giants look for video content to push down their expanding distribution pipes.
The CRTC green-light came Friday despite fears that the cable giant’s rising power could reduce competition in the Canadian media industry.
To soothe those critics, the CRTC, in its ruling Friday, recalled that Shaw has promised to make the rights to its TV programming available to its competitors for broadcast on mobile devices and over the Internet.
Regulatory approval also ends a long and at times bitter battle for control of Canwest Global by Shaw.
The cable operator last February first proposed to secure a controlling stake in Canwest Global to help recapitalize the media group, but opted for an outright acquisition after it faced a knock-down legal battle with Goldman Sachs.
And Shaw will also need to pay another $440 million to U.S. bondholders that, along with Goldman Sachs, have controlled Canwest Global through its voluntary bankruptcy proceedings and will exit the Canadian market once the broadcaster emerges from creditor protection.
Canwest Global’s TV assets landing in Shaw’s hands will bring relief to Hollywood suppliers that have long supplied Global Television with U.S. network series and movie product.
The major U.S. studios demanded stand-by letters of credit to enable Canwest Global to continue receiving U.S. network series for its primetime schedule through its current court-directed bankruptcy proceedings.
The CRTC will next consider a separate $3.2 billion deal by phone giant BCE Inc. for domestic network CTV as the Internet and other emerging digital platforms continues to reshape the Canadian broadcast system.
And the regulator also signalled Friday that it will hold public hearings in May 2011 to consider the possible impact of the current round of takeover deals on the Canadian broadcast sector.