The proposed merger between Rogers and Shaw was initially announced on March 15, 2021
Canadian telcos Rogers Communications and Shaw Communications announced that their proposed merger is expected to close before April 7, after receiving final regulatory approval from the Canadian government.
On March 31, the Minister of Innovation, Science and Industry, François-Philippe Champagne, provided final approval to transfer Shaw’s spectrum licenses to Videotron. Prior to the close of the Rogers-Shaw merger, Shaw will sell Freedom Mobile to Videotron.
Following the approval by Canadian government, Rogers, Shaw, the Shaw Family Living Trust, and Quebecor agreed to extend the outside date of the closing of the merger of Rogers and Shaw and the acquisition of Freedom Mobile by Videotron, a wholly-owned subsidiary of Quebecor, to April 7, 2023.
The Rogers-Shaw transaction has already been approved by the shareholders of Shaw and the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission
“The Competition Bureau, the Competition Tribunal and the Federal Court of Appeal have all weighed in on the potential competitiveness a fourth national player could have on our telecom industry,” Champagne said in a statement.
“The evidence is clear: Having a strong fourth competitor does lead to lower prices, as we’ve seen in Atlantic provinces, Quebec, Ontario, Alberta and British Columbia…I have secured behalf unprecedented and legally binding commitments from Rogers and Videotron. And, after imposing strict conditions, the spectrum licenses of Freedom Mobile will be transferred to Videotron,” the minister added.
As part of these agreements and conditions, Videotron committed to offer plans that are comparable to those currently available in Quebec, and offer options at least 20% cheaper than those made available by the major players. The company cannot transfer the Freedom Mobile licenses for a period of ten years and will also have to expand its 5G wireless network in Freedom Mobile’s pre-existing operating territory within two years.
Separately, Rogers committed to creating 3,000 new jobs in Western Canada and maintaining them for a minimum of 10 years after the closing date. The telco will also establish a headquarters in Calgary and will invest CAD1 billion ($743.5 million) to expand broadband Internet access, at speeds of at least 50/10 megabits per second and 5G mobile service in areas where it is not currently available;
Rogers also committed to invest at least CAD2.5 billion to enhance its 5G network in Western Canada and CAD3 billion in additional network service expansion projects.
“These agreements are subject to significant financial damages for non-compliance: up to CAD200 million in the case of Videotron and up to $1 billion in the case of Rogers,” Champagne said.
“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,” Tony Staffieri, president and CEO of Rogers Communications, said in a statement.
The proposed merger was initially announced on March 15, 2021.
In August 2022, Rogers Communications, Shaw Communications and Quebecor entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor. The involved parties also said that the sale of Freedom Mobile would pave the way for the establishment of a “strong fourth national wireless services provider”.
