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Corus Entertainment buys Shaw Media

In a move that it describes as “transformational” and which significantly enhances its content portfolio, Canadian integrated media and content company Corus Entertainment is to acquire Shaw Media, the television broadcasting division of Shaw Communications from the telco in a C$2.65 billion (€1.70bn) cash and stock deal. The transaction will give Corus ownership of all of Shaw Media’s leading brands, resulting in a combined portfolio with significant scale, including 45 specialty television channels, 39 radio stations, digital assets, the content studio, Nelvana, and 15 conventional television stations.

“This is a transformational acquisition that redefines Corus and Canada’s media landscape,” said Doug Murphy, President and Chief Executive Officer, Corus Entertainment. “This game-changing transaction brings together a powerful portfolio of synergistic media assets that will solidify Corus’ position as the market leader in the highly valued Women, Kids and Family segments. It will also advance our strategic priorities through investment in content creation for our own platforms, and for global markets.”

“The time is right to unite these two strong media companies. With the addition of Shaw Media, we will have the competitive scale, the brands, the content and the team to accelerate our growth,” added Murphy. “We are also pleased to announce that Barbara Williams, currently Executive Vice President, Broadcasting and President, Shaw Media, will join Corus in a senior leadership capacity upon the closing of the transaction. As one of the industry’s most-respected executives, Barbara will play an integral role shaping the new Corus, given her in-depth knowledge and exceptional leadership capabilities, as we bring our people and assets together.”

The combined leadership team is expected to be announced at or prior to the close of the transaction.

“We are confident that this transaction will create great value for our shareholders,” said Fernand Bélisle, Chairman of the Special Committee of the Board of Directors of Corus formed in connection with the transaction. “We are buying Shaw Media at an attractive price, financing it prudently and the transaction is immediately accretive on an earnings and free cash flow per share basis. This combination will deliver strong free cash flow which will allow the company to de-lever quickly while maintaining its current dividend.”

“We believe these two companies will form a winning combination. Their complementary mix of assets and strong management teams fit extremely well together,” said JR Shaw, Executive Chair, Shaw Communications Inc. “This transaction represents an exciting new chapter and allows us, as a family, to participate in what we see as a very successful future for Corus, one that will support a vibrant Canadian broadcast system.”

Shaw Media’s assets include the speciality channels Food Network Canada, HGTV Canada, DIY Network Canada, Slice, Lifetime, History Canada, H2, Showcase, National Geographic Canada, Nat Geo Wild Canada, Action, MovieTime, IFC Canada, Global News: BC1, BBC Canada, DejaView, Crime + Investigation, DTOUR and FYI. It also includes Global Television’s national conventional service with stations in Vancouver, Okanagan, Edmonton, Calgary, Lethbridge, Saskatoon, Regina, Winnipeg, Toronto, Montreal, Halifax and Saint John.

On a fiscal 2015 basis, Corus and Shaw Media combined generated ~C$1.9 billion in revenue, ~C$619 million in adjusted EBITDA and ~C$430 million of free cash flow. The transaction is expected to generate C$40-C$50 million of annual cost synergies to be realised within 24 months, in addition to significant revenue synergies.

“This is a pivotal transaction that will create one of Canada’s leading integrated media and content companies, with the scale and media assets to succeed in the new regulatory environment,” said Brad Shaw, Chief Executive Officer, Shaw Communications Inc. “Our significant investment in the new Corus demonstrates our commitment to the success of this powerful combination.”

This transaction is subject to approval by the Canadian Radio-television Telecommunications Commission. It is also subject to approval by Corus’ minority shareholders, at a special meeting of shareholders expected to occur in March 2016.

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