Rogers-Shaw deal blocked by Ottawa | Jobi Cool


Quebecor Inc. CEO Pierre Karl Peladeau says he will accept the terms laid out by Industry Minister Francois-Philippe Champagne for the sale of wireless operator Freedom Mobile to Videotron Ltd., part of a proposed $26 billion deal between Rogers Communications Inc. and Shaw Communications Inc.

Peladeau said in a statement Tuesday night that Quebecor, which owns Videotron, agrees to incorporate the industry minister’s clause into a new version of the transaction, clearing the way for the sale of Freedom to go through.

“They are in line with our business concept, which has proven very successful in Quebec, where we have taken significant market share in a very short period of time,” the statement said.

“We will work to deliver better prices for Canadians in the other provinces and end the reign of the ‘Big 3’ by promoting competition, the public good and the digital economy in Canada.”

Shaw’s ownership of Freedom Mobile has been widely seen as the main obstacle to approval of the Rogers-Shaw deal. Montreal-based Videotron agreed to buy Freedom Mobile for $2.85 billion earlier this year.

The sale of Freedom Mobile to Videotron would result in Quebecor acquiring all of Freedom’s wireless and Internet customer brands as well as all of Freedom’s infrastructure, spectrum and retail locations in a move that would expand Quebecor’s wireless operations nationwide.

Champagne said earlier Tuesday night that he would not approve the proposed Rogers-Shaw merger, but left the door open to a revised deal, saying that before Videotron would agree to buy Freedom, it would need two specific concessions.

“Today I officially rejected this request,” he said. “My decision formally closes that chapter of the original proposed transaction.”

He said Videotron must agree to keep the Freedom wireless licenses for at least 10 years.

“We don’t want someone to reverse these permits, we want them to be in it for the long haul,” he said.

Second, Champagne said he would “expect to see” wireless prices in Ontario and Western Canada reduced by about 20 percent, which is in line with Videotron’s current offer in Quebec.

Champagne said his conditions for the Freedom license transfer were clear, but did not make clear whether a successful sale of Freedom Mobile would mean the Rogers-Shaw deal could still be approved.

“There’s a chapter that’s closed — Shaw-Rogers, it’s closed. There’s a new chapter opening.”

Champagne approval is required for the transfer of a spectrum license.

Along with Champagne’s approval, the Rogers-Shaw deal required the green light from the Competition Commissioner and the CRTC.

The Canadian Radio-Telecommunications Commission offered its conditional approval for the broadcast portion of the deal in March.

Mediation is planned for later this week between the competition commissioner and Rogers and Shaw. The Competition Authority is trying to block the merger, saying the sale of Freedom Mobile does not go far enough to allay its concerns that telecommunications bills would rise along with less competition.

This report by The Canadian Press was first published on October 25, 2022.

CTV News is a division of Bell Media, part of BCE Inc.

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