Bell’s $3.4bn Astral deal approved with conditions

Bell Canada Enterprises’ C$3.4 billion (US$3.2 billion) acquisition of rival Astral Media has been approved, but it must sell resulting holdings in local networksincluding Disney Junior and Cartoon Network.

Canada’s media regulator the CRTC has greenlit to deal, which has been in the works for more than a year, providing BCE adheres to a series of conditions aimed at quelling fears about the scope of Bell’s growing influence over Canadian media.

“Astral’s application put forward a different approach and responded to many of our concerns,” said Jean-Pierre Blais, chairman of the CRTC. “Yet there remained a significant risk that BCE could exert its market power to limit choice and competition.

“To ensure the public interest is served, we are requiring BCE to invest in new Canadian programming and sell more than a dozen services, and we are putting in place a number of competitive safeguards. This will maintain a healthy and competitive broadcasting system that offers more programming choices to Canadian consumers and citizens and more opportunities for Canadian creators.”

Among these, BCE, whose Bell Media division will house its new assets, must invest C$246.9 million, including C$175.4 million on TV-related initiatives, in Canadian media over the next seven years – C$72 million more than had been proposed.

It must also keep all of its local television stations open, plus the two it will acquire from Astral, until at least 2017, with current levels of programming maintained.

However, it will be required to sell off 10 radio stations and 11 TV channels. The television channels are French-language nets Disney Junior, Historia, MusiquePlus, MusiMax, Séries+, Télétoon and Télétoon Rétro; and English-language Cartoon Network, Disney XD, Teletoon, Teletoon Retro and The Family Channel.

Corus Entertainment, which operates a number of joint venture channels with Astral, has already launched a C$400.6 million offer for several speciality nets, including Teletoon and Cartoon Network.

However, BCE will gain access to French-language pay and speciality nets Canal D, Canal Vie, CINÉPOP, Super Écran, VRAK.TV and Ztélé and English-language nets The Movie Network, TMN Encore, Viewer’s Choice Canada DTH and terrestrial, and two local channels.

BCE will also have to invest in feature film production and agree not to implement higher bundling tariffs on operators.

Overall, the deal gives BCE control of 22.6% of the French-language market and 35.8% of the English-language market.

The CRTC had previously rejected an initial merger proposal last year, which would have given BCE 45% of the English-language market and 35% of the French-language market.

Industry body ACTRA welcomed the moves made to protect the public interest, singling out the higher cash investments in programming.

“We are pleased with the CRTC’s decision to support a diverse, healthy, competitive Canadian media market,” said ACTRA national executive director Stephen Waddell.

“While we remain concerned about the general concentration and vertical integration granted to BCE, we had argued that if this merger were to be approved conditions must be attached, and the commission has done that.”