TORONTO, MONTREAL and CALGARY – Rogers Communications, Shaw Communications and Quebecor Inc. announced today they have signed a definitive agreement for the sale of Shaw’s Freedom Mobile to Quebecor subsidiary Videotron.
The definitive agreement is “substantially consistent” with what was announced with regards to the sale back in June, according to a press release. It still needs to be cleared under the Competition Act and by the Minister of Innovation, Science and Industry and is contingent on the close of the merger of Rogers and Shaw, which itself still needs approval under the Competition Act and from the minister.
“The parties strongly believe the Freedom Transaction provides the best opportunity to create a strong fourth national wireless services provider and addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw Transaction,” a press release says.
“With this Agreement, the new combined business of Videotron and Freedom will be well-positioned to launch a strong, competitive national 5G offering, using Videotron’s 3500 MHz holdings. Accordingly, the parties believe the Rogers-Shaw Transaction should now be approved.”
“We are very pleased with this Agreement, and we are determined to continue building on Freedom’s assets,” said Pierre Karl Péladeau, president and CEO of Quebecor, in the release. “Quebecor has shown that it is the best player to create real competition and disrupt the market.”
“Over the past six years we invested billions of dollars and launched products and services that disrupted the marketplace and helped redefine what Canadians can expect from their wireless carrier, but there’s much more that could be done as next generation networks are deployed, technology becomes more sophisticated and consumers’ demands for fast and responsive applications continue to increase,” said Brad Shaw, executive chairman and CEO of Shaw.
“Bringing Freedom Mobile and Quebecor together will expand Freedom’s scope to create a national provider with greater ability to invest and compete for the future growth and technology Canadians will need.”
“This Agreement with Quebecor brings us one step closer to completing our merger with Shaw,” said Tony Staffieri, president and CEO of Rogers. “We strongly believe that this divestiture solution addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry and we look forward to securing the outstanding regulatory approvals for our merger with Shaw so that we can start delivering its significant long-term benefits to Canadian consumers and businesses, including improved network resiliency.”
While the sale of Freedom is presumably in line with what the Minister of Innovation, Science and Industry wanted to see happen before he approved the merger, the Commissioner of Competition has indicated in documents submitted to the Competition Tribunal that he does not believe the sale of only Freedom will be an effective remedy.
The commissioner has applied to have the Competition Tribunal block the Rogers/Shaw merger. The parties attempted to come to an agreement through mediation, however, that failed. A tribunal hearing has been set for November.
