Competition Bureau Canada



Competition Bureau Canada

March 04, 2013 16:52 ET

Significant Divestitures in Bell-Astral Merger to Preserve Competition

OTTAWA, ONTARIO--(Marketwire - March 4, 2013) - The Competition Bureau announced today that, following an extensive review of BCE Inc.'s (Bell) proposed acquisition of Astral Media Inc. (Astral), it has reached an agreement with Bell that preserves competition in the supply of English and French pay and specialty television programming services in Canada.

Under the terms of the Consent Agreement filed with the Competition Tribunal today, Bell must divest itself of Astral's ownership interests in the following pay and specialty television channels: The Family Channel, Teletoon, Teletoon Retro, Disney XD, the Cartoon Network, Disney Jr. (English and French), Historia, Séries+, Télétoon, Télétoon Rétro, MusiquePlus and Musimax. Additionally, the Consent Agreement contains restrictions on Bell, including a prohibition on imposing restrictive bundling requirements on any provider seeking to carry The Movie Network or Super Écran.

"Consumers who pay for television programming are looking for greater choice, more innovative product offerings, and reasonable prices," said John Pecman, Interim Commissioner. "Today's agreement is essential to preserving choice for consumers and ensuring continued and effective competition in this area."

During its review, the Bureau collected and analyzed a large volume of information from the parties and many third parties. In addition, multiple industry participants were interviewed, including: owners of television programming services; cable, satellite and wireless service providers; media buying agencies; and consumer groups. The Bureau determined that, without this Consent Agreement, Bell's acquisition of Astral's pay and specialty television channels would likely have led to increased prices, less innovation and reduced choice for television programming.

Bell has also indicated that it will divest itself of a number of radio stations to comply with the Canadian Radio-television Telecommunications Commission's (CRTC) Common Ownership Policy. The Bureau is satisfied that these proposed divestitures are sufficient to ensure the transaction will not result in a substantial lessening or prevention of competition in any radio market.

The proposed transaction is still subject to review by the CRTC.

For further information on the Bureau's review of this matter, please consult the fact sheet and backgrounder.

A copy of the Consent Agreement will be available shortly on the Competition Tribunal Web site.

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

Fact Sheet

Bell's Proposed Acquisition of Astral

The Proposed Transaction:

- On March 16, 2012, Bell and Astral announced an agreement whereby Bell would acquire all of the issued and outstanding shares of Astral for approximately $3.38 billion. The proposed transaction would significantly increase Bell's media content, including its television programming, as well as its presence in radio.

- Astral operates 25 television services, 84 radio stations, more than 100 websites and digital media properties, and 9,500 out-of-home advertising signage locations in Québec, Ontario and British Columbia.

- Bell operates 28 conventional TV stations, 30 specialty channels and 33 radio stations. It broadcasts media content to Canadian customers across multiple platforms, including television, the Internet and mobile phones.

Important Considerations:

- Bell and Astral own highly valued television programming in Canada. Rival distributors depend on this content to offer competitive services to their customers and Canadian consumers expect to have access to more innovative products and services, not fewer.

- Some market participants expressed concerns related to the effect that increased concentration and vertical integration in the broadcasting industry is said to be having on consumers and other television programming providers.

- The proposed transaction is still subject to approval by the Canadian Radio-television and Telecommunications Commission (CRTC). While the Bureau reviews proposed transactions under the Merger provisions of the Competition Act, the CRTC reviews matters under the Broadcasting Act.

Competition Concerns:

- The Bureau's review focussed on whether the proposed transaction would provide Bell with enhanced market power in negotiating the terms of its programming services with distributors.

- The Bureau determined that Bell's acquisition of Astral's pay and specialty television channels would have led to increased prices and reduced choice and innovation in the television distribution industry.

- For further details about the Bureau's analysis, please see the backgrounder.

Divestitures:

- To address the Commissioner's concerns with respect to its acquisition of Astral, Bell has agreed to divest a significant portion of the English and French language programming services that it would have acquired from Astral and has also agreed to behavioural restrictions to complement these divestitures.

- Under the terms of the Consent Agreement filed with the Competition Tribunal today, Bell must divest itself of Astral's ownership interests in the following television channels: MusiquePlus, Disney Junior (English and French), The Family Channel, Disney XD, Historia, Musimax, Séries+, Teletoon/Télétoon, Teletoon Retro/Télétoon Rétro and the Cartoon Network.

- Additionally, the Consent Agreement includes behavioural restrictions on Bell, including a prohibition on imposing restrictive bundling requirements on any provider seeking to carry The Movie Network or Super Écran.

- Bell has also indicated that it will divest itself of a number of radio stations to comply with the Canadian Radio-television Telecommunications Commission's (CRTC) Common Ownership Policy. The Bureau is satisfied that these proposed divestitures are sufficient to ensure the transaction will not result in a substantial lessening or prevention of competition in any radio market.

- The Bureau today issued a No Action Letter (NAL) indicating that as a result of the Consent Agreement, the Bureau does not intend to challenge the transaction before the Competition Tribunal.

Contact Information

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    media@cb-bc.gc.ca

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    Competition Bureau
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