Canada approves largest telecommunications deal in country’s history with Rogers-Shaw merger

OTTAWA, Ontario (AP) — The largest telecommunications deal in Canadian history will go forward after Rogers Communications Inc.’s $26-billion Canadian (US$19 billion) takeover of Shaw Communications Inc. received approval from Ottawa on March 31.

The approval means the deal has cleared its final regulatory hurdle just over two years after it was first announced. Canada has among the most expensive cellular rates in the world.

But Industry Minister François-Philippe Champagne took a stern tone on Friday, vowing to “be like a hawk on behalf of Canadians” to ensure compliance with the conditions he outlined, aimed at bolstering competition and lowering phone and internet costs.

Champagne approved the transfer of Shaw-owned Freedom Mobile’s wireless licenses to Quebecor Inc.’s Videotron, which operates in Quebec and some border regions of Ontario. Rogers and Shaw agreed in June 2022 to sell Freedom Mobile to Videotron for $2.85 billion Canadian (US$2.1 billion) in an attempt to ease competition concerns raised by the original proposal.

Rogers announced its deal to buy Shaw in March 2021 and the deadline to close the deal has been pushed back numerous times. The three companies said Friday they expected to complete the transaction by April 7.

Champagne said Ottawa has secured 21 legally enforceable commitments from Rogers and Videotron to “actually drive down prices.”

“Make no mistake. We will be monitoring their performance under these terms and conditions and making sure that we enforce the terms of these contracts on behalf of Canadians,” he said.

On Friday, the minister said Ottawa’s conditions “should not be taken lightly.” He said they would ensure a “fourth national player can go toe to toe with the Big Three and actually drive down prices.”

Along with Rogers, Bell Canada and Telus Corp. have the vast majority of the market share in the Canadian telecommunications sector.

Those conditions include Rogers establishing a second headquarters in Calgary and adding 3,000 new jobs based in Western Canada “in the coming months” that it must maintain for at least 10 years.

Videotron must offer plans that are at least 20% lower than its competitors and spend $150 million Canadian (US$111 million) over the next two years to upgrade Freedom Mobile’s network. It is restricted from transferring any Freedom Mobile licence for a decade.

If Rogers breaches its conditions, it must pay up to $1 billion Canadian ($740 million) in damages, the minister said. Videotron would potentially be subject to $200 million Canadian (US$147 million) in penalties if it fails to meet its commitments.

 

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