Bell parent company BCE Inc., in its most ambitious takeover move yet, has put together a hostile, $1.2-trillion offer for a majority stake in the Government of Canada.
The offer, which was just announced, would make BCE the largest company in the country, and make Canada the largest privately-owned country in the world.
“We were reaching the limits of what we could do under the current federal framework,” Bell says in a note to investors explaining the proposal. “Our board of directors concluded that the only way to continue our growth was to seek to acquire the federal government itself.”
Once the acquisition is complete, Bell would control Canada’s military, its banks, and transportation and telecommunications companies. “The increased flexibility that will come from having a controlling stake in regulatory bodies will give us the power to expand just about every aspect of our business,” the note said.
Analysts were mixed on the proposed deal. Ceci Etonpuassohn of RBC Capital Markets said BCE would be in a highly leveraged position if this deal were to go through, and he wasn’t convinced that the increased ability to levy taxes on 35 million customers would be enough to pay off the massive debt that would be undertaken. “I might have preferred a different option, like a joint deal with Shaw communications and Rogers, or maybe if they’d just started with buying a small province first, as a test run.”
If accepted by Canada’s current owner, Tim Horton, the deal would also require approval from the CRTC, since it changes its own effective ownership. This means approval would likely take another year.