BCE to takes full control of CTV, Thomson to regain control of Globe and MailBy Rob Gillies, AP
Friday, September 10, 2010
BCE to take full control of CTV
TORONTO — BCE Inc., Canada’s largest telecom company, said Friday it agreed to acquire full ownership of the largest private broadcaster in Canada while the Thomson family said it is regaining majority ownership of the country’s national newspaper.
BCE said it obtained 100 percent ownership of CTV television for $1.3-billion Canadian (US$1.25 billion). It already owned 15 percent and will acquire the remaining stake from Woodbridge Co., the Ontario Teachers’ Pension Plan and Toronto Star owner Torstar Corp.
BCE chief executive George Cope said it will enhance BCE’s ability to provide video content across its mobile, online and TV platforms. BCE already offers home phone, mobile phone, internet and cable TV services.
In a separate deal, Woodbridge, the Thomson family holding company that controls Thomson Reuters Corp., will regain 85 percent majority ownership of the Globe and Mail newspaper that it previously controlled. BCE will retain a 15 percent stake.
The deal is the latest in a series of ownership changes in Canada’s media industry and comes a decade after BCE acquired a smaller portion of CTV in a transaction valued at $2.3 billion Canadian (US$2.2 billion). That 2000 transaction was one of the early moves in which corporate Canada tried to cash in on a growing trend towards convergence of the internet, telecom, newspapers and broadcasting.
However, BCE later sold off most of its CTV stake in 2006 as former CEO Michael Sabia decided to focus on the company’s core telephone business.
Cope said the technology, regulatory and competitive environment in Canada has caught up to that convergence vision of 10 years ago when BCE previously bought a large stake in CTV.
He said technology has made video more readily available on the internet, mobile phones and tablet computers like Apple’s iPad.
“There is no doubt the landscape has changed dramatically in the last five years and I would say particularly in the last 24 months, Cope said.
CTV operates the top television network and 27 stations across Canada. The deal also includes 30 specialty channels including sports channel TSN and CHUM Radio, which operates 34 radio stations.
The total value of the deal including debt is $3.2 billion Canadian (US$3 billion).
Cope said they want to capitalize on the growth of video on the internet and mobile phones. He said BCE’s home cable business now represents 40 percent of revenues and said that BCE gets more revenue from TV now than their traditional home phone business.
Cope noted that rival Canadian cable companies Shaw Communications, Rogers Communications and Videotron are now in the mobile phone business and have increased their media holdings. A similar move was made earlier this year by Bell competitor Shaw Communications when it bought Canada’s Global TV from a restructuring Canwest.
Cope said their three largest cable competitors are fully integrated and said they were not prepared to buy content from them when they are competing for end users.
CTV President Ivan Fecan said in a statement that “it’s extremely important to be part of a vertically integrated company that can take advantage of video delivered on multiple screens.”
The deal splits up the assets of CTVglobemedia, which owned the Globe and Mail newspaper. The Ontario Teachers Pension Plan and Torstar Corp. will shed their holdings in CTVglobemedia.
It is expected to close no later than mid-2011. Canadian regulators must approve it.
Shares of BCE rose 9 cents to $31.85 on the New York Stock Exchange.
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