BCE to buy all of CTV

BCE Inc. said Friday it has agreed to acquire broadcast giant CTV for $1.3 billion.

The Montreal-based BCE said it will purchase 85 per cent of CTV for $1.3 billion. Bell already owns 15 per cent of the company.

The total value of the deal is estimated at $3.2 billion, including debt.

BCE is buying the remaining stake from the Woodbridge Company Ltd., the Toronto-based holding company of the Thomson family, as well as the Ontario Teachers Pension Plan and Torstar Corp.

"Acquiring CTV’s range of premier video content enhances Bell’s execution of our strategic imperatives by leveraging our significant broadband network investments, accelerating Bell’s video growth across all three screens – mobile, online and TV – and achieving a competitive cost structure," said George Cope, president and CEO of Bell Canada and BCE, in a statement.

Cope said 100 per cent ownership of CTV "enables Bell to maximize strategic and operating synergies with CTV, including the efficiency of our content and advertising spend."

"Our industry is changing rapidly. Increasing vertical integration across the communications landscape, ongoing technological advancement and key regulatory developments introduce new opportunities with the ownership of high-demand content by Bell. Our acquisition of CTV more than levels the playing field in our increasingly competitive industry."

BCE expects to close the deal by mid-2011. However, the deal faces several regulatory hurdles in the way including approvals from the Canadian Radio-television and Telecommunications Commission and the Competition Bureau.

In a separate transaction, Woodbridge has agreed to acquire the Globe and Mail newspaper, in which BCE will continue to retain a 15 per cent stake.

Ivan Fecan, chief executive with CTV, emphasized the importance of vertical integration across conventional, specialty and digital TV and radio assets.

"In today’s digital age, it is extremely important to be part of a vertically integrated company that can take advantage of video delivered on multiple screens," he said in the statement. "CTV has emerged stronger than ever from the recession. . . . This is the right deal at the right time."

CTV operates Canada’s no. 1 TV network with 27 stations across the country. The broadcaster also owns 30 specialty channels, including leading sports network TSN as well as web properties CTV.ca, MuchMusic.com and others. CTV also owns CHUM Radio, which operates 34 radio stations across Canada.

With files from Financial Post