Rogers Communications Inc. will sell Freedom Mobile Inc. at Quebecor Inc. for $ 2.85 billion in a deal that is expected to appease federal regulators opposed to its proposed acquisition of Shaw Communications Inc.
The deal comes after the antitrust regulator reiterated its opposition to Rogers’ plan to buy Shaw and is subject to approval by the Canadian Competition Authority and the federal Department of Innovation, Science and Technology. Economic Development, companies said.
It covers all Internet customers and Freedom’s branded wireless, infrastructure, spectrum and retail locations, they added in a statement.
Toronto-based Rogers made a $ 26 billion bid for Calgary-based Shaw, and also offered to sell Shaw’s Freedom mobile unit to alleviate competition concerns as part of the deal. .
The agreement offers “viable and sustainable” competition, companies say
The Competition Bureau had said the sale would weaken Freedom’s operations, reducing “competitive discipline” among domestic carriers and lead to a transfer of wealth from low- and middle-income groups to wealthy Rogers and Shaw families. .
Rogers, Shaw and Quebecor argued that their agreement would effectively address these concerns and keep alive a fourth “strong and sustainable” wireless operator in Canada, because the agreement would expand Quebecor’s wireless operations nationwide.
“The parties strongly believe that the agreement effectively addresses the concerns … about viable and sustainable wireless competition in Canada,” the companies said in a statement, referring to the control body’s reservations. competition and the Minister of Industry.
The companies will also offer transportation and roaming services in Quebecor as part of the agreement.
“We look forward to obtaining exceptional regulatory approvals for our merger with Shaw so that we can deliver significant long-term benefits to Canadian consumers, businesses and the economy,” said Rogers CEO Tony Staffieri.
Canadian law allows for the approval of mergers that harm competition if companies can demonstrate that the mergers bring efficiency to the economy.
The Rogers-Shaw transaction announced in March 2021 already has the approval of Shaw shareholders and the Telecommunications and Radio and Television Commission of Canada. However, it is still subject to review by the Competition Bureau and the Minister for Innovation, Science and Economic Development.
A woman walks past a Freedom Mobile store in Toronto in this 2016 archive photo. Rogers Communications says it will sell Freedom Mobile in a deal that hopes to appease regulators opposed to its takeover of Shaw Communications, its nearest competitor. (Nathan Denette / The Canadian Press)
The Competition Bureau has extended its opposition to Rogers’ proposed acquisition of Shaw in new communications filed with the Competition Court on Friday.
In legal documents released after the markets closed, the agency challenged Rogers’ claims about efficiency and said the acquisition of its nearest rival is anti-competitive and would harm consumers through higher prices, services low quality and lost innovation.
He also argued that the proposed sale of Shaw’s Freedom Mobile “is not an effective remedy” because it will not replace the growing competition that Shaw Mobile would offer in Alberta and British Columbia and make Freedom “a later weaker competitor” than it would have had. . state.