Buy out of Bell Canada marks one of the largest takeovers

In one of the largest leveraged buyouts in history, Canadian telecom provider Bell Canada has agreed to be bought for C$51.7 billion (US$48.5 billion / Rs198,025.5 crore), the largest deal of its kind in the country''s history.

A consortium, whose members include two US private equity firms, Providence Equity Partners and Madison Dearborn Partners and one of Canada''s largest public sector pension funds, is behind the buyout of Bell Canada, which has about 18 million customers and 54,000 staff.

Bell Canada, which generated sales of more than US$16 billion last year, was the subject of a fierce bidding war involving a number of private equity operators as well as Telus, Canada''s second largest phone company.

The acquisition is being structured to meet Canadian laws capping foreign ownership of shares in the flagship firm to 47 per cent of its total equity.

Michael Sabia, chief executive, Bell Canada''s said of the deal, "This is a huge amount of value delivered to our shareholders." Shareholders must now approve the transaction as must federal regulators before it can proceed.

The parent company, Bell Canada Enterprises, also owns a satellite communications company, Telesat Canada, and has an interest in CTVglobemedia, Canada''s premier media company, which owns the Globe and Mail newspaper.