Bell closes deals for The Source, Virgin Mobile Canada
Last Updated: Thursday, July 2, 2009 | 5:10 PM ET
CBC News
Bell Canada has completed two deals worth a total of $277 million, acquiring Canadian electronics retailer The Source and buying the half of Virgin Mobile Canada that it didn't already own.
Bell paid $135 million for The Source and $142 million for the 50 per cent stake of Virgin Mobile. Circuit City renamed RadioShack stores The Source after acquiring them with the purchase of Barrie, Ont.-based InterTan Inc. for $371 million in 2004.
Bell also announced Thursday that The Source will sell Bell and Virgin Mobile wireless products exclusively starting in January 2010. It already sells the high-definition television service Bell TV and will offer other services, such as Bell home phone and Bell internet, in the coming months.
"With its approximately 750 high-traffic locations from coast to coast and clear track record of success in consumer retail, acquiring The Source is a far faster and more cost-effective approach to increasing Bell's national distribution footprint than building out new retail locations," said George Cope, CEO of Bell and parent company BCE Inc.
The Source will operate independently from Bell and will maintain its well-known national brand and its own executive team, including CEO Ron Cuthbertson, the company said.
Bell also announced the appointment of Robert Blumenthal as president of Virgin Mobile Canada. He replaces the departing Andrew Black, who led the company since its launch in 2004.
"The Virgin Mobile Canada team has built a unique wireless brand with special appeal to young Canadians and a reputation for outstanding service right across the country," Cope said in a release.
"We look forward to assisting Virgin Mobile Canada in maximizing the network, product, global roaming and distribution advantages that come with being part of the broader Bell organization," he said.
While the company will access Bell's existing and new wireless networks and share common distribution in high-traffic retail locations, it will continue to operate independently with its own distinctive brand, customer service operations and executive team, Bell said.
Shares of BCE closed down six cents to $23.94 on the Toronto stock exchange.
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