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Canadian media firm born
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September 15, 2000: 3:55 p.m. ET
BCE, Thomson and Woodbridge roll assets into C$3.9B conglomerate
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NEW YORK (CNNfn) - BCE Inc., Thomson Corp. and Woodbridge Co. Ltd. joined forces Friday to create a C$3.9 billion ($2.7 billion) Canadian media conglomerate that will boast assets ranging from the Globe and Mail newspaper to Sympatico, Canada's leading Internet portal.
The yet-to-be-named new company will reach roughly one-third of Canada's online customers, 82 percent of the country's television audience, and boast assets in nearly all media outlets. The new venture is being formed through various assets and cash contributed by each company and will be controlled by BCE, Canada's largest telecom operator.
Sounding very much like other top media CEOs who have crafted several major mergers during the last year, executives of all three companies said the deal was driven by the growing need to deliver content across all platforms. The discussions on forming such a company began nearly a year ago, executives said.
"With Thomson and Woodbridge, BCE will create Canada's premier media company and pursue opportunities created by the convergence of the Web with media opportunities," BCE Chairman and CEO Jean Monty said. "We really want to have a company here that builds the dominant media and content company in this country.
"While others may be larger at the moment, none will boast the suite of leading brands that you will find in our company."
CTV, Sympatico head BCE contributions
Monty said the company will begin with pro-forma revenue of C$1.3 billion ($880,000) a year and should be able to grow those revenues at 8 percent per year. Company officials hope to close the deal during the first quarter of 2001.
Ivan Fecan, currently the president and chief executive of CTV, Canada's No. 1 private television network, will head up the new venture. CTV is one of several assets being contributed by BCE (BCE: Research, Estimates), which in turn will own a 70.1 percent stake in the new venture. Thomson will maintain a 20 percent interest with Woodbridge controlling the rest.
 Perhaps the most valuable contribution is BCE's 71 percent interest in Sympatico-Lycos, a consumer-to-business joint venture BCE formed with U.S. Internet portal Lycos Inc. (LYCS: Research, Estimates) earlier this year as part of its recent push to focus more on Internet-related properties.
Monty said the new venture did not discount earlier commitments to ultimately take Sympatico-Lycos public at some point, but he indicated he had not yet broached the subject with Lycos.
For its part, Thomson will contribute the Globe and Mail, billed by the company as Canada's national newspaper, related Internet sites and ROBTv, Canada's only specialty business news channel.
Like BCE, the Toronto-based company has undergone a gradual internal reorganization recently designed to shift the company's focus from print to electronic publishing. Earlier this year, the company committed to selling off all of its nearly 130 newspapers except the Globe and Mail to help attain that goal.
While company officials admitted the Globe and Mail's profit margins have been slipping in recent months, particularly under the recent price war with Canada's National Post, Monty said he considered the paper an important part of the new company.
"We're not getting into this with the intention of not winning," he said. "[Our competitors] have to understand that they will have to contend with somebody that is capable of holding and standing up in any price war."
Woodbridge Co., which operates as the Thomson family holding company, is contributing C$385 million ($259 million) in start-up capital for the new organization.
Kenneth Thomson, who controls 73 percent of Thomson Corp., will remain chairman of the Globe and Mail and insisted the deal was more about securing the paper's long-term future than moving a slow-growth operation off Thomson's balance sheet.
"If we wanted to exit the newspaper business, we would have at least considered the sale of the Globe and Mail," he said. "Whatever the mechanics, we don't regard this as the sale of the Globe and Mail. We just have so much confidence in this situation."
BCE shares inched forward 56 cents to $23.69 in late afternoon trading on the New York Stock Exchange. 
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Thomson Corporation
BCE
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