Canada approves multibillion-dollar Rogers-Shaw telecoms deal
Mass takeover deal, first signed in 2021, faced challenges from Canada’s antitrust agency and consumer advocates.
Canada has granted final approval for Rogers Communications Inc’s $15 billion ($20 billion Canadian) buyout of Shaw Communications Inc, approving a deal that will create the country’s second-largest telecommunications company.
The green light for the deal came on Friday when Minister of Innovation, Science and Industry François-Philippe Champagne agreed to transfer wireless licenses from Shaw’s Freedom Mobile unit to Quebecor Inc under certain conditions.
Freedom Mobile’s proposed $2.1 billion ($2.85 billion Canadian) sale to Quebec-owned Videotron has been pivotal in addressing the antitrust concerns surrounding the deal, given the overlap between Rogers’ and Wireless’s wireless divisions. Shaw.
Champagne announced 21 conditions, including that Videotron must offer plans at least 20 percent cheaper than competitors and invest $111 million ($150 million Canadian) to upgrade Freedom Mobile’s network over the next two years.
He also restricted the transfer of Freedom Mobile’s licenses for 10 years.
The Canadian government asked Rogers to establish a Western headquarters in Calgary and create 3,000 new jobs in Western Canada to be maintained for at least 10 years, while investing $4 billion ($5.5 billion Canadian) to improve network services.
A breach of the commitments will result in a fine of up to $148 million ($200 million Canadian) for Videotron and $739 million ($1 billion Canadian) for Rogers, Champagne said as he announced a freeze on all major license transfers in the telecom sector .
The Rogers-Shaw deal, which closed in March 2021, allows Ontario-focused Rogers to capitalize on Shaw’s strong presence in western Canada’s sparsely populated regions and help the company continue its efforts to bring 5G into the to roll out all over the country, to double.
The acquisition has been opposed by consumer advocates, politicians and rival telecom companies because it unites two major players in a market that already has some of the highest wireless communications bills in the world.
But efforts by Canada’s antitrust agency to block the merger were rejected by the Competition Tribunal and a Canadian court in what was seen as a test case for the regulator’s ability to improve consumer choices in a country where a handful companies control large segments of business. .
The closing date of the deal has been postponed four times.
It is the largest in the Canadian telecom industry since BCE spun off its stake in Nortel Networks in a $65.6 billion ($88.7 billion Canadian) transaction in 2000.