BCE Inc. ( BCE - Analyst Report ) , a leading Canadian telecom operator, has received clearance from Canada’s Competition Bureau to complete its pending acquisition of Astral Media for $3.38 billion (C$ 3.29). Canada’s anti trust agency cleared the deal under the condition that BCE Inc owned Bell Canada should offload certain Pay-TV and radio assets.

Initially in Mar 2012, Bell Canada took its first step to acquire Astral for $3.38 billion, which would have made it an undoubted leader in the French language channel in the country, particularly in Quebec, where Astral owns 13 French language channels. However, Canadian Radio-television and Telecommunications Commission (CRTC) rejected the deal on Oct 2012, citing that it would result in concentration of too much power in the hands of Bell Canada in the broadcasting sector.

In Nov 2012, the two companies submitted a renewed bid that focused on addressing the regulatory concerns of CRCTC. The closing date of the transaction was extended till Jun 2013.

Per the new agreement, Bell will retail eight of Astral’s TV channels including 6 French language channels and two English language channels – The Movie Network and TMN Encore. As part of the deal, Bell also needs to sell six of Astral’s TV joint ventures including the bilingual Teletoon and Cartoon Network Canada to competitor Corus Entertainment Inc. that will make the latter a dominant force in the children’s TV space. Corus will also acquire two of Astral’s radio stations in Ottawa as part of the divestiture requirement. The Corus transaction is valued at $400.6 million and is also subject to regulatory approvals.

Additionally, Bell has also agreed to sell some of the popular Astral Media TV channels and eight English language radio channels through an auction process which is currently ongoing. These additional divestitures signify that Bell is desperate to close the deal, as it will place the company in a better position in Quebec. At present, it lags far behind rival Quebecor Inc in that city.

Following the acquisition, Bell media will have a 23.0% share of the French language media market and 35.7% of the country’s English language market. The deal will increase Bell’s presence in Quebec where, the company currently holds just 8% of the French language market.

We believe this deal is a welcome development for Bell prior to the final approval from CRCTC, which if cleared will allow Bell’s customers significant programming benefit particularly in Quebec. Nevertheless, the approval did not seem to have energized the share holders of BCE as the stock leaped only 13 cents on the Tuesday trade in Nasdaq.

Other Stocks to consider

Currently BCE Inc. Carries a Zacks Rank #3 (Hold). Some other stocks to consider in the Canadian broadcasting industry are Rogers Communications Inc. ( RCI - Analyst Report ) , Comcast Corp. ( CMCSA - Analyst Report ) and CBS Corp. ( CBS - Analyst Report ) . All the stock currently carries a Zacks Rank #2 (Hold).