Canada finally clears Rogers, Shaw merger

Canada finally clears Rogers, Shaw merger

AdobeStock_389651681_Rogers building.jpg

Canada has granted approval for Rogers Communications’ US$15 billion buyout of Shaw Communications, creating the second-largest telecoms company.

Clearance for the deal reportedly came on Friday as Francois-Phillip Champagne, the country’s minister of innovation, science and industry agreed to the transfer of wireless licenses held by Shaw’s Freedom Mobile Unit to Quebec Inc under some conditions.

Champagne previously attempted to block the move. He believed that the merger would reduce competition and result in higher bills and poorer service for Canadians.

In October 2022, he said: “My decision formally closes that chapter of the original proposed transaction.

“As you’ve heard me say many times before, I will never waver in my commitment to promote competition and make wireless services more affordable for all Canadians.”

However, Champagne announced 21 conditions during a news conference relating to the affordability and accessibility of wireless services as the move was finally approved.

He said he will watch “like a hawk” to ensure that the companies uphold their commitments.

The deal includes allowing Quebecor Inc’s Videotron to expand outside of Quebec, where it currently operates. The company will do this by acquiring the Shaw-owned Freedom Mobile for US$2.85 billion.

Videotron must offer plans that are at least 20% lower than its competitors and spend US$150 million over the next two years to upgrade the Freedom Mobile network.

If Rogers breaches the conditions, the company will have to pay up to US$1 billion in damages. Videotron, meanwhile, will be subject to US$200 million in penalties if it fails to meet the commitments.

The takeover was initially announced in 2021, with Rogers edging out BCE Inc in a bidding war for Shaw.

The deal was cleared by the Canadian Radio-television and Telecommunications Commission approved Rogers’ acquisition of Shaw’s broadcasting services in March 2022.

In a statement, Rogers welcomed the approval.

“We are very pleased to move forward with this transformative merger and proudly deliver on our commitments to enhance and expand network coverage, connect underserved communities, and improve access for low-income Canadians,” said Tony Staffieri, president and CEO of Rogers.

Rogers also reaffirmed its major commitments which include investing US$1 billion to improve connectivity for rural, remote and indigenous communities and unserved remote highways in Western Canada.

The company adds that it will invest US$2.5 billion to expand and upgrade its network for consumers and businesses in Western Canada.

It will also invest US$3 billion in technology and network services in Western Canada, including modernising and expanding fibre-powered internet across the country.

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