Following an agreement announced on June 17, Rogers Communications, Shaw Communications and Quebecor announced today that they have entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor, subject to regulatory approvals and completion of the Shaw and Rogers merger, announced March 15, 2021.
Quebecor’s acquisition of Freedom Mobile will create a strong Canadian wireless service provider that can offer competitive, high-quality services, including 5G connectivity across Canada, Quebecor said in a statement.
The parties state that they are convinced that the Freedom transaction is the best option for the emergence of a strong fourth Canadian wireless service provider, and to address the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw transaction. Together, thanks to this agreement, Videotron and Freedom will be advantageously positioned to offer, across Canada, a solid and competitive offer of 5G technology using Videotron’s 3500 MHz band spectrum. The parties therefore believe that the Rogers-Shaw transaction should now be approved.
The definitive agreement announced today is substantially consistent with the terms announced on June 17, 2022.
“We are very pleased with this agreement, and we look forward to continuing to develop Freedom’s assets,” said Pierre Karl Péladeau, president and chief executive officer of Quebecor, in a press release. “We have demonstrated that we are the best player to create real competition and disrupt the market. Our extensive industry experience, combined with Freedom’s large Canadian footprint, will enable us to provide more choice, better value, and increased accessibility to consumers in British Columbia, Alberta, and Ontario, thanks to discounted multi-service packages and innovative products.”
For his part, Tony Staffieri, President and CEO of Rogers, said, “This agreement with Quebecor brings us closer to the conclusion of the merger with Shaw. We firmly believe that the sale of Freedom to Quebecor responds to the concerns raised by the Commissioner of Competition and by the Minister of Innovation, Science and Industry. We are now awaiting the regulatory approvals required to complete our merger with Shaw so that we can begin to deliver its important long-term benefits to Canadian consumers and businesses, including improved network reliability.”
Although the agreement is final, it is nevertheless conditional upon, among other things, its authorization under the Competition Act and the approval of the Minister of Innovation, Science and Industry. It is also conditional on the completion of the Rogers-Shaw merger and would be completed at virtually the same time as the merger. As previously announced, Rogers, Shaw, and the Shaw Family Living Trust have agreed to extend the deadline for the Rogers-Shaw transaction to December 31, 2022.
The transaction, which involves the merger of Shaw with Rogers, has already been approved by Shaw shareholders, the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission, and remains subject to review of the Competition Tribunal and the approval of the Minister of Innovation, Science and Industry.
The Commissioner of Competition has filed an application with the Competition Tribunal for an order preventing the parties from proceeding with the Rogers-Shaw transaction, and the closing of the Rogers-Shaw transaction is conditional on either an agreement with the Commissioner of Competition or a decision of the Competition Tribunal that sets out conditions allowing the transaction to be finalized.