CALGARY -- Shaw Communications is selling its media division to Corus Entertainment for $2.65 billion -- a deal that will help fund the telecom company's purchase of Wind Mobile.
Shaw Media includes the Global Television network and 19 specialty channels including HGTV Canada, Food Network Canada and Showcase -- formerly part of the Canwest business group before it was split up.
Corus already owns a number of other specialty TV channels as well as a network of radio stations and the Nelvana animation studio.
Both companies are controlled by the Shaw family through its voting shares. Shaw Communications will become a large shareholder in Corus as a result of the deal, which involves both cash and shares.
"Through this transaction we are able to crystalize an attractive value for Shaw Media and realize substantial value creation for Shaw shareholders since acquiring CanWest in 2010," said Shaw director Paul Pew, chair of a special board committee.
Shaw Communications chief executive Brad Shaw added that "we are grateful to our colleagues at Shaw Media for their contributions to Shaw's success over the past five years . . ."
It's the second major deal for Shaw Communications (TSX:SJR.B) in recent weeks. The Calgary-based cable, Internet and satellite TV company announced on Dec. 16 that it's buying Wind Mobile in a deal worth $1.6 billion.
The sale of Shaw Media to Toronto-based Corus will move about $1.85 million in cash to Shaw Communications, which will also receive about 71 million Corus non-voting class B shares (TSX:CJR.B).
After the deal closes, Shaw Communications will own about 39 per cent of the equity in Corus, including both class A and B shares, but focus its own business on communications infrastructure rather than media content.
"With the previously announced acquisition of Wind and sale of Shaw Media, Shaw will be focused on delivering consumer and small business broadband communications supported by its best-in-class wireline, WiFi and wireless infrastructure," Brad Shaw said in a joint statement.
Corus CEO Doug Murphy said the purchase of Shaw Media "positions the combined business as one of Canada's leading media and content companies with significantly enhanced scale and growth prospects going forward."
The Shaw Media deal is subject to approval by Corus shareholders, including those with non-voting shares not hold by interested parties. It is expected to close by the end of Shaw's third quarter ending May 31. The Wind deal is also expected to be closed by about the same time.
Corus announced separately Wednesday that its revenue for the first quarter of fiscal 2016 was $228.3 million, up from $228.1 million a year earlier. The increase was mainly due to its television division, which offset a decline in radio. Total net income was $41.3 million, down from 51.9 million in the comparable period.
