BCE Inc. BCE-T has agreed to acquire full ownership of CTV Inc. in a $1.3-billion deal that dramatically reshapes the landscape of Canadian media and telecommunications, and changes the ownership structure of The Globe and Mail.
The merger of Canada's largest telecom carrier and the country's No. 1 broadcaster is the latest in a series of deals heralding a new era of convergence between media companies and the cable and phone giants that distribute their content.
"This is truly an historic day for Bell," said George Cope, BCE's president and CEO, on a call with analysts on Friday morning. "We are purchasing 100 per cent of Canada's No. 1 media company."
"I think he got CTV cheap,” said Ivan Fecan, CTV's chief executive officer, referring to Mr. Cope. “We have emerged from the recession and the market is picking up, and given our very strong leading positions in speciality and conventional and radio, we’re incredibly well positioned to benefit from the market picking up.”
Later in the day, Mr. Fecan told CTV staff in a memo that he planned to retire once the regulatory process for the deal was complete.
With the deal, which has yet to be cleared by federal regulators, Bell Canada Enterprises acquires all of CTV's television assets, including the CTV network and specialty cable channels such as TSN, Bravo and the Business News Network.
The transaction also breaks apart CTVglobemedia Inc., created a decade ago when CTV merged with The Globe and Mail. Woodbridge Co. Ltd., the holding company of the Toronto-based Thomson family, will regain majority ownership of the Globe with an 85-per-cent stake. BCE will retain its current 15-per-cent share of Canada’s largest circulation national newspaper and its related websites.
|
Read more about the BCE-CTV deal: |
"The pleasure for me is immense today," David Thomson, chairman of Woodbridge, said. "We are blessed with an extraordinary business in Thomson Reuters. The Globe really matters to the family. We are now ready to put teams together to innovate and implement. We are the premiere content provider in this country, and we only seek to become better."
Phillip Crawley, publisher of The Globe and Mail said: "We suddenly just don't separate from CTV. We've got all kinds of relationships with CTV. They'll carry on for the time being."
BCE’s move into broadcasting has obvious echoes of then-CEO Jean Monty’s bid in 2000 to form a converged media and communications empire, first by spending $2.3-billion to acquire CTV, then by combining it with the Globe to create Bell Globemedia, in which it had a controlling stake of about 70 per cent.
That experiment was eventually rejected by the market, and in 2005, Mr. Monty’s successor, Michael Sabia, sold off the bulk of BCE’s stake to Woodbridge, The Ontario Teachers' Pension Plan and Torstar Corp. TS.B-T The company was then renamed CTVglobemedia to reflect Bell’s diminished influence.
This latest move marks the departure of Teachers and Torstar, which held 25 and 20 per cent, respectively, of CTVglobemedia. BCE put the total transaction value at $3.2-billion, including debt.
For CTV, being part of BCE gives the media company an assured spot in the 130-year-old telecom company's national communication lines, which consist of TV, Internet and wireless networks. It also guarantees CTV that as other distribution companies sew up exclusive content arrangements and strike deals, the media company won't be left behind.
Also, as television audiences increasingly migrate to watching video online, CTV's relationship with Bell, which has millions of Internet customers, might allow the broadcaster to more effectively hang on to its audience and wring profit from ratings.
