CanWest Global Communications' $2.3-billion takeover of Alliance Atlantis has been approved by the CRTC.
"We are satisfied that this transaction meets the requirements for Canadian control both in law and fact," said CRTC chair Konrad von Finckenstein in a release issued late Thursday.
The takeover — first announced in January — was controversial from the start, because of the substantial financial involvement of Goldman Sachs, a huge Wall Street investment bank.
Under the deal, Goldman Sachs would get a third of the voting shares, but almost two-thirds of the equity in CanWest Investments, a CanWest subsidiary that will acquire the Alliance Atlantis assets.
By 2011, CanWest will merge its existing broadcasting properties into CanWest Investments. That will boost CanWest's investment in the merged company to over 50 per cent.
"Thus, taking into account the entire transaction, CanWest’s share of the overall equity and voting shares does not cause concern" to the Canadian Radio-television and Telecommunications Commission, it ruled.
Several arts groups and media unions had argued during CRTC hearings against allowing the takeover to proceed, fearing that a green light to this deal would allow foreign entities to take effective control of Canadian media interests.
The CRTC said it, too, had concerns about whether CanWest would really control the final merged entity. It said CanWest responded by changing the proposed governance structure.
"The commission is satisfied that these changes ensure the broadcasting companies will remain under Canadian control at all times," it said.
But critics of the deal didn't see it that way. "This is definitely a change in the foreign ownership rules through the backdoor and the CRTC should have had more backbone on this matter than it displayed," said Ian Morrison of the Friends of Canadian Broadcasting.
Federal broadcasting rules require majority Canadian ownership of Canadian broadcasting companies.
Alliance Atlantis owns 13 specialty television channels, including:
- Showcase.
- Discovery Health.
- The Food Network.
- HGTV.
- History Television.
- The Life Network.
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