Rogers takeover of Shaw to go ahead as Ottawa approves one of biggest corporate takeovers in Canada’s history
The federal government has approved a key licence transfer needed for Rogers and Shaw to close their $26-billion deal.
Innovation Minister Francois-Philippe Champagne said that his department has approved the transfer of wireless licences from Shaw to Videotron, which has a side deal to buy Shaw's Freedom Mobile division.
The message I hear from Canadians is we pay way too much for telecom services and we want more options. Full stop," Champagne said during a Friday morning news conference.
A fourth national player will be able to go toe-to-toe" with the Big Three telecom, Rogers, Bell and Telus to help drive down prices. To do so, there will be 21 legally enforceable conditions and commitments for the tech giants included in the transfer, which include investing $5.5 billion to extend 5G coverage and $1 billion to connect rural, remote and Indigenous communities.
In addition, Videotron will not be allowed to transfer the Freedom Mobile licences for 10 years and Rogers must establish a Western headquarters in Calgary and maintain it for a minimum of 10 years, creating 3,000 new jobs.
Should either party breach these commitments, they will pay up to $200 million in Videotron's case and up to $1 billion in the case of Rogers, he said.
The licence transfer was the only regulatory approval standing in the way of Rogers and Shaw finalizing their merger, which the companies announced in March 2021.
They revealed a $2.85-billion deal to sell Freedom Mobile to Quebec-based Videotron last June in a bid to address concerns about reduced competition in the wireless industry.
The Canadian Radio-television and Telecommunications Commission approved the transfer of Shaw's broadcast assets to Rogers in March 2022.
Late last year, the Competition Tribunal dismissed an attempt by the Competition Bureau to block the deal and the Federal Court of Appeal upheld that ruling in January.
The companies have extended the deadline to close the transaction on several occasions, most recently pushing the date back to March 31.
Correction: This article has been updated to reflect that Videotron will pay up to $200 million, not $2 million, should it breach its commitments.
With files from Christine Dobby