Rogers Communications and Shaw Communications announced the sale of Freedom Mobile to Quebecor for about $2.2 billion in hopes of getting the Rogers/Shaw merger approved by regulators.
According to the companies, the sale of Freedom to Quebecor will “ensure the presence of a strong and sustainable fourth wireless carrier across Canada.”
The Rogers-Shaw transaction was announced in March 2021. The companies put their transaction on hold last month while trying to negotiate a settlement that would appease regulators, who threatened to block Rogers’ $16 billion purchase of Shaw on the grounds it would hinder competition, particularly in wireless.
In a press release, the companies said their move to sell Freedom should effectively address the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry (ISED).
The sale to Quebecor includes all Freedom branded wireless and internet customers, as well as Freedom’s infrastructure, spectrum and retail locations. Shaw and Rogers agreed to provide Quebecor with long-term backhaul and backbone transport services and roaming.
“Our agreement with Quebecor to divest Freedom is a critical step towards completing our proposed merger with Shaw. We strongly believe the divestiture will meet the Government of Canada’s objective of a strong and sustainable fourth wireless services provider,” said Rogers President and CEO Tony Staffieri in a statement.
“This is a turning point for the Canadian wireless market,” said Quebecor President and CEO Pierre Karl Péladeau in a statement. He also said Quebecor’s Videotron subsidiary is a strong fourth player that, coupled with Freedom’s footprint in Ontario and Western Canada, can deliver concrete benefits for all Canadians. Freedom Mobile serves more than 2 million customers in Ontario, Alberta and British Columbia.
The Freedom transaction is conditional, among other things, on clearance under the Competition Act and the approval of ISED; it would close concurrently with closing of the Rogers-Shaw transaction.
CBC reported that Quebecor beat out several other parties to reach the agreement. One of those involved Globalive founder and chairman Anthony Lacavera, who said on Twitter Saturday that his company’s bid was rejected because Rogers is “afraid to compete.”