* Watchdog approves deal, with forced sales and conditions
* Bell says Corus to buy some TV, radio assets
* CRTC due to open public consultation on deal this week
By Alastair Sharp
TORONTO, March 4 Canada's Competition Bureau has
approved BCE Inc's plan to acquire Astral Media Inc
for C$3 billion ($2.9 billion), but the Bell parent's
offer to buy the media company must still pass muster with the
The competition watchdog said on Monday its approval carried
the condition that BCE, a growing broadcaster, must sell some of
Astral's pay and specialty television channels, including
several Disney channels.
In addition, the bureau said BCE must not impose
"restrictive bundling requirements" on any rival provider
seeking to carry Astral's flagship movie channels in either
English or French.
"It is starting to look more like the breakup of Astral
rather than a simple merger with Bell," said Michael Geist, an
University of Ottawa academic focused on law and technology.
"The bigger question of whether this transaction meets the
public interest test at the CRTC remains an open question."
Critics, including BCE's rivals, had complained that an
enlarged BCE would use its clout as a content owner to push
costs higher across the industry or promote exclusive content
over its television and Internet services to poach subscribers.
In a deal that closed in 2011, BCE bought CTV, Canada's
largest private broadcaster, giving it leading news and sports
BCE will retain eight Astral TV services, all in French
except The Movie Network, it said in a separate statement.
It said Corus Entertainment Inc would buy Astral's
share of six television joint ventures as well as two radio
stations for C$400.6 million, and that a process is under way to
sell more assets.
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The Canadian Radio-television and Telecommunications
Commission rejected BCE's first offer for Astral in October,
citing the inordinate influence it would give BCE.
The commission is expected to reveal details of BCE's
subsequent offer this week, when it sets a date for public
"I believe the decision today and how the transaction is
being presented and how many TV stations are being sold, it does
add some probability to a positive outcome at the CRTC level,"
said Maher Yaghi, an analyst at Desjardins Securities, on BNN
Television. "But nothing is sure until it's done."
BCE's retention of many of Astral's Francophone assets will
likely challenge Quebecor Inc's dominance of
"That landscape will have changed quite dramatically for the
benefit of viewers there," Mirko Bibic, BCE's head of regulatory
affairs, said in a phone interview.
Its divestiture of a string of English-language channels,
conversely, should work in the favor of rivals such as Rogers
As part of its initial bid, BCE had already agreed to sell
some of Astral's radio stations so that the combined company
would not exceed the maximum number of stations a single company
is allowed to own in any geographical market.
BCE said the retained TV channels and radio stations plus
Astral's outside advertising business provided 77 percent of the
target's earnings before interest, taxes, depreciation and