Rogers Communications on Monday announced the closing of its $26 billion acquisition of Shaw Communications, after receiving final approval from Ottawa on Friday, ending a two-year period of uncertainty as regulators scrutinized the deal.
“This is a memorable day for our customers, who will benefit from the latest network technology and services, and for our teams, who have worked very hard to get us here today,” Rogers CEO Tony Staffieri said in a press release.
“We are proud to bring these two iconic companies together to bring more value, more connectivity and more innovation to Canadians. »
Industry Minister Francois-Philippe Champagne on Friday gave the green light to the takeover by agreeing to transfer wireless licenses from Shaw-owned Freedom Mobile to Quebecor’s Videotron, clearing the final regulatory hurdle for pave the way for the realization of the main agreement.
Rogers and Shaw agreed in June 2022 to sell Freedom Mobile to Videotron for $2.85 billion in an effort to alleviate competition concerns raised by the original proposal. The sale of Freedom was also finalized on Monday.
In approving the agreement, Minister Champagne imposed 21 conditions on Rogers and Videotron, including the establishment of a second head office in Calgary and the addition of 3,000 new jobs in Western Canada.
The company is also set to spend $5.5 billion to expand 5G coverage and grow additional network services, as well as another $1 billion to connect rural, remote and indigenous communities.
In addition, Videotron must offer packages at prices at least 20% lower than those of its competitors and spend $150 million over the next two years to upgrade Freedom Mobile’s network.
If Rogers breaches its terms, it will have to pay up to $1 billion in damages. For its part, Videotron would potentially be exposed to penalties of $200 million if it did not respect its commitments.
“We are very proud to officially proceed with the acquisition of Freedom Mobile and to be able to count on its Canadian footprint as well as on the expertise and experience of its employees,” declared the President and Chief Executive Officer of Quebecor, Pierre Karl Péladeau, in a press release.
“The alliance between Freedom and Videotron will sustainably transform the Canadian wireless market for the benefit of consumers who, in this new context of healthy competition that we are offering, will have access to innovative products and services at best price. »
Minister Champagne also announced that his department would not authorize any further wireless spectrum transfers until it had completed the review of Canada’s spectrum transfer framework.
Rogers first announced its deal to buy Shaw in March 2021 and the closing deadline has been pushed back several times since then. The last postponement had set this deadline at April 7.
“Rogers and Shaw have been connecting Canadians for over 50 years. We are very excited to join forces and form one company to build on a shared heritage of investment, innovation and entrepreneurship,” Rogers Chairman Edward Rogers said in a statement. .