CanWest Global Communications and New York-based investment bank Goldman Sachs completed their takeover of Alliance Atlantis Communications ( AAC ) yesterday. The final price for the Canadian broadcaster and film distributor was pegged at $1.95 bn (C$2.3 bn). The acquisition cements CanWest's position as the nation's largest media company. The prime asset, in CanWest's strategic vision, is 13 specialty channels worth an estimated $1.3 bn.

No sooner was the deal announced than industry speculation kicked into overdrive as details of the complex financing arrangement were revealed. CanWest is only fronting $112m of the purchase price; in exchange, it has entered a deal with Goldman that will commit its own broadcast assets to a jointly-held entity until 2011, at which time Goldman and CanWest will divide the assets according to the performance of the overall businesses. This is seen as something of a gamble; in the final accounting, CanWest may lose majority control of its current assets.

Goldman's share of the prize includes Motion Picture Distribution, AAC 's releasing arm, and the international rights to the CSI : Crime Scene Investigation franchise; it has already agreed a deal to transfer those rights to the US rights holder, TV network CBS. Due to regulations regarding foreign ownership of film distribution, Goldman will need to find a Canadian partner to help it operate MPD.

The deal is subject to sharehold approval - already seen as a formality - as well as regulatory approval. Canadian regulation prevents foreign entities from majority ownership of Canadian broadcast assets.

'I believe this transaction represents great value for our shareholders,' said AAC executive chairman Michael MacMillan. 'The combination of CanWest's conventional and specialty television businesses and Alliance Atlantis' 13 specialty television channels creates an excellent foundation for future growth in both businesses.'

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