It’s been a long, agonizing process, but today Rogers Communications announced that its purchase of Shaw Communications is expected to close by April 7, 2023, after receiving final regulatory approval.
That final approval came from Canada’s Minister of Innovation, Science and Industry, which approved the transfer of Shaw’s spectrum licenses to Videotron. These license transfers are necessary because as part of the deal, Shaw was required to divest its Freedom Mobile wireless business. Shaw is selling Freedom Mobile to Videotron, which is a wholly-owned subsidiary of Quebecor.
The Freedom Mobile approvals were the final piece of the puzzle.
The Rogers-Shaw transaction was first announced in March 2021, so it’s taken two full years for Rogers’ purchase of Shaw to close. Originally, the deal was valued at $16 billion. Today, the parties didn't provide an update on the final value of the deal, but news outlets are reporting valuations anywhere from $15 billion to $19 billion.
Over the past two years, regulators expressed concerned the deal would hinder competition, particularly in wireless.
While Freedom Mobile will belong to Videotron, Rogers will retain the much smaller Shaw Mobile, which operates mostly in Alberta and British Columbia.
Those Shaw Mobile customers will be added to Rogers' more than 10 million wireless customers across all of its brands, according to CBC.
On December 31, 2022, Canada’s Competition Tribunal allowed the Rogers-Shaw deal and the sale of Freedom Mobile to proceed. And this was upheld by the Federal Court of Appeal on January 24, 2023.
Rogers has made a number of commitments to get the merger approved, including:
- Investing $1 billion to improve connectivity for rural, remote, and Indigenous communities and unserved remote highways in Western Canada
- Investing $2.5 billion to expand and upgrade Rogers 5G network in Western Canada
- Investing $3 billion in technology and network services in Western Canada, including modernizing and expanding fiber-powered internet
- Creating 3,000 new jobs in Western Canada to support the investments in networks, services, and technology
- Maintaining a Western Canada headquarters in Calgary
- Expanding its low-cost Connected for Success Internet program to eligible Canadians across Western Canada
- Introducing a new low-cost Connected for Success wireless program nation-wide for eligible Canadians
- Honoring a five-year price commitment for Shaw Mobile customers
These commitments are legally enforceable and include annual reporting and financial penalties for non-compliance.