Rogers Communications Inc. will sell Freedom Mobile Inc. of Quebecor Inc. for $ 2.85 billion in a deal that it hopes will reassure federal regulators who oppose its proposed takeover of Shaw Communications Inc.
The deal comes after the antitrust regulator reiterated that it opposes Rodgers’ plan to buy Shaw and is subject to approval by the Canadian Competition Authority and the Federal Department of Innovation, Science and Economic Development, the companies said.
It covers all of Freedom’s branded wireless and Internet customers, infrastructure, spectrum and retail sites, they added in a statement.
Toronto-based Rodgers made a $ 26 billion offer for Calgary-based Shaw and also offered to sell the Shaw Freedom mobile device to allay competition concerns as part of the deal.
The deal ensures “viable and sustainable” competition, the companies say
The Competition Bureau said the sale would weaken Freedom’s operations, reduce “competitive discipline” among national carriers and lead to the transfer of wealth from low- and middle-income groups to wealthy Rodgers and Shaw families.
Rodgers, Shaw and Quebec say their agreement will effectively address those concerns and keep Canada’s “strong and resilient” fourth wireless carrier alive, as the deal expands Quebec’s wireless operations nationwide.
“The parties firmly believe that the agreement effectively addresses concerns … about viable and sustainable wireless competition in Canada,” the companies said in a statement, citing reservations from the competition authority and the industry minister.
The companies will also provide transportation and roaming services to Quebec as part of the deal.
“We look forward to receiving exceptional regulatory approval for our merger with Shaw so that we can deliver significant long-term benefits to Canadian consumers, businesses and the economy,” said Rodgers CEO Tony Stafieri.
Canadian law allows the approval of mergers that are detrimental to competition if companies can demonstrate that the mergers bring efficiency to the economy.
The Rodgers-Shaw deal, announced in March 2021, has already been approved by Shaw’s shareholders and the Canadian Broadcasting and Telecommunications Commission. However, it remains subject to review by the Competition Bureau and the Minister of Innovation, Science and Economic Development.
A woman walks past a Freedom Mobile store in Toronto in this photo of the 2016 file. Rogers Communications says it will sell Freedom Mobile in a deal that hopes to reassure regulators who oppose the takeover of Shaw Communications, its closest competitor. (Nathan Dennett / Canadian Press)
The Competition Bureau has expanded its opposition to Rodgers’ proposed takeover of Shaw in new statements to the Competition Tribunal on Friday.
In legal documents released after markets closed, the agency disputed Rodgers’ claims of effectiveness and said acquiring its closest competitor was anti-competitive and would harm consumers through higher prices, lower service quality and lost innovation. .
He also argues that the proposed sale of Freedom Mobile to Shaw “is not an effective remedy” as it will not replace the growing competition that Shaw Mobile will provide in Alberta and British Columbia, and will make Freedom “subsequently weaker. competitor ”than he would have. has been.
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