With this transaction, Roger and Shaw believe that the merger of their operations should be approved by the Canadian government
Canadian operators Rogers Communications, Shaw Communications and Quebecor have entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor.
The parties said that the transaction is still subject to regulatory approvals and closing of the proposed merger between Shaw and Rogers, which had been initially announced on March 15, 2021.
The involved parties also said that the sale of Freedom Mobile would pave the way for the establishment of a “strong fourth national wireless services provider”, something that would address the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw merger.
The new combined business of Videotron and Freedom Mobile will be in a position to launch a national 5G offering, using Videotron’s 3.5 GHz frequencies.
“We are very pleased with this agreement, and we are determined to continue building on Freedom’s assets,” said Pierre Karl Péladeau, president and CEO of Quebecor.
The executive noted that the acquisition of Freedom Mobile will allow Quebecor to offer expanded services for customers in British Columbia, Alberta and Ontario.
Roger and Shaw now believe that the merger of their operations should be approved by the Canadian government.
“This agreement with Quebecor brings us one step closer to completing our merger with Shaw,” said Tony Staffieri, president and CEO of Rogers. “We strongly believe that this divestiture solution addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry and we look forward to securing the outstanding regulatory approvals for our merger with Shaw,” Staffieri added.
Last month, Rogers Communications said it had delayed the deadline for its CAD20 billion ($15.56 billion) acquisition of Shaw Communications to December 31, 2022.
The Canadian telco said that this new deadline may be further extended to January 31, 2023.
Canada’s competition bureau had put on hold Rogers’ proposed purchase of Shaw, as it believes the deal will negatively impact competition in the domestic telecom sector, leading to increased mobile bills for consumers.
The Rogers-Shaw transaction has already been approved by the shareholders of Shaw and the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission, and remains subject to review by the Competition Tribunal and Competition Bureau and approval by the Minister of Innovation, Science and Industry.
Rogers and Shaw promised more than $2 billion in 5G network expansions, a new public fund to help connect rural and indigenous communities, promises of new jobs and infrastructure money for government projects and more.
Currently, Canadian residents have four options for mobile operators — Rogers, Shaw, Telus Corp. and BCE Inc.