West News Wire: The second-largest telecommunications firm in the nation will now exist thanks to Canada’s final approval of Rogers Communications Inc.’s $15 billion ($20 billion Canadian) acquisition of Shaw Communications Inc.
Francois-Philippe Champagne, the minister of innovation, science, and industry, gave the deal the go-ahead on Friday after he agreed to certain conditions regarding the transfer of wireless licenses owned by Shaw’s Freedom Mobile division to Quebecor Inc.
Given the overlap between Rogers and Shaw’s cellular businesses, the proposed $2.1 billion ($2.85 billion Canadian) sale of Freedom Mobile to Quebecor-owned Videotron has been essential in resolving antitrust issues with the transaction.
Champagne set 21 requirements, among them that Videotron offer plans that are at least 20% less expensive than those of rivals and spend $111 million ($150 million Canadian) to update the network of Freedom Mobile.
He also restricted the transfer of Freedom Mobile’s licences for 10 years.
The Canadian government asked Rogers to set up a Western headquarters in Calgary and create 3,000 new jobs in Western Canada that must be maintained for at least 10 years while investing $4bn ($5.5bn Canadian) to improve network services.
A breach of the commitments will lead to a fine of up to $148m ($200m Canadian) for Videotron and $739m ($1bn Canadian) for Rogers, Champagne said while announcing a freeze on all major licence transfers in the telecom sector.
The Rogers-Shaw deal, struck in March 2021, will allow Ontario-focused Rogers to gain from Shaw’s strong presence in the sparsely populated regions of Western Canada and help it double down on its efforts to roll out 5G throughout the country.
The buyout had faced opposition from consumer advocates, politicians and rival telecoms companies because it unites two big players in a market that already has some of the highest wireless bills in the world.
But the Canadian antitrust agency’s efforts to block the merger were rejected by the Competition Tribunal and a Canadian court, in what was seen as a test case for the regulator’s ability to improve consumer choices in a country where a handful of companies control large swathes of business.