(Montreal) Pending the verdict of the regulatory authorities on the acquisition of Freedom Mobile, Quebecor has made a discreet acquisition that will increase its footprint in the Toronto area.
Posted yesterday at 1:11 p.m.
Videotron’s parent company has acquired independent telecommunications provider VMedia in a transaction that has not been officially announced. The amount of the transaction remains unknown.
The transaction was, however, subject to regulatory conditions regarding a license transfer from the Canadian Radio-television and Telecommunications Commission (CRTC). The administrative tribunal published Quebecor’s request on its site. The news was first reported by the specialized site CARTT.ca.
VMedia is an internet provider in Ontario. The company has approximately 200 employees and 50,000 subscribers, mostly concentrated in the Greater Toronto Area. However, the company was struggling to accelerate its growth due to difficult access to capital.
VMedia will continue to operate under the same brand, but will be able to take advantage of Quebecor’s financial resources to finance its growth, explained George Burger, one of the co-founders during an interview with the specialized media.
Quebecor has confirmed by email that it has acquired all of the shares of VMedia, but that the amount of the transaction remains confidential.
The president and CEO of Quebecor, Pierre Karl Péladeau, has said on several occasions that the company founded by his father was ready to expand its activities outside Quebec. The businessman believes that the Quebec market has become “quite mature” and he believes that the rest of Canada, where competition is less strong, would offer lucrative business opportunities.
Quebecor has also made an offer to purchase 2.85 billion on Freedom Mobile, the wireless division of Shaw Communications. The sale of Freedom aims to have Rogers accept Shaw’s offer to buy Shaw for $26 billion. Both transactions are conditional on the green light from regulatory authorities. This week, Rogers and Shaw extended the deadline for closing the acquisition to December 31.
The purchase of VMedia, which offers IP television, Internet connection and telephony, could complement Freedom Mobile’s wireless activities. “The company has complementary innovative solutions that will be exploited to their full potential across Canada,” Quebecor said by email. VMedia is now one of the key partners that will accelerate Quebecor’s plan to create greater competition in Canada. »
In 2021, the Montreal company acquired 294 blocks of spectrum in the 3500 MHz band, for an amount of 830 million. More than half of this investment is concentrated in four Canadian provinces: Ontario, Manitoba, Alberta and British Columbia.
A first step
The transaction is “proof” that Quebecor is truly committed to expanding its presence outside Quebec, believes Jérôme Dubreuil, of Desjardins Capital Markets. “The investment in Ontario demonstrates an intention to be there for the long term. »
The analyst believes the deal could tip the balance in Quebecor’s favor with the Competition Bureau, which was concerned about a potential fourth-largest provider’s ability to offer packages containing more than one service. “We believe that a combination of Quebecor, Freedom and VMedia is in a better position to offer packages than Shaw was. »
There are still many regulatory elements to clarify for Quebecor. The transaction with Rogers and Shaw still needs to be approved. In another case, the CRTC has not yet clarified the regulatory conditions surrounding its decision to allow regional operators to lease access to the networks of major Canadian telecommunications companies, provided they have local frequency spectrum themselves. .
“These factors lead to uncertainty about Quebecor’s future in wireless outside of Quebec,” acknowledges Mr. Dubreuil. At the same time, the acquisition of VMedia reduces the risks of integration of Freedom while that of VMedia will already have begun. It also makes it easier to offer bundled packages in Ontario. »