Ottawa allows Rogers-Shaw deal by approving transfer of Freedom Mobile to Videotron with conditions, financial penalties
more than two years after it was first announced by approving the transfer of Shaw’s wireless licences to Videotron Ltd. with a number of conditions attached.
Videotron has agreed to pay $200-million if it breaks its promises, including that it will offer wireless plans 20 per cent less expensive than those offered by the major wireless carriers. The largest takeover in Canadian telecom history was announced in March 2021, after Rogers beat out BCE Inc. in a bidding war for Shaw, the Calgary-based cable company founded in the late 1960s by telecom entrepreneur JR Shaw.
Rogers’s takeover of Shaw obtained the first of three regulatory approvals when it won the blessing of the Canadian Radio-television and Telecommunications Commission. The regulator approved the transfer of Shaw’s broadcasting assets to Rogers in March of 2022. The three-member panel worked through the holidays to render a swift decision, concluding that the sale of Freedom to Videotron will create a “more aggressive and effective” wireless competitor.
Rogers president and chief executive officer Tony Staffieri has said that he remains confident in the deal’s underlying economics despite the additional financing costs. Rogers expects to generate $1-billion in synergies over two years from the takeover, even as it faces the possibility of heightened competition from a growing wireless rival.
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