Quebecor Inc. has agreed with Rogers Communications Inc. and Shaw Communications Inc. to buy Freedom Mobile for an enterprise value of $2.85 billion, the companies said on Friday.
The deal comes after the antitrust regulator reiterated that it opposed Rogers’ plan to purchase Shaw, and is subject to approval by Canada’s competition watchdog and the federal department of Innovation, Science and Economic Development, the firms said.
It covers all of Freedom’s branded wireless and internet customers, infrastructure, spectrum and retail sites, they added in a statement.
Toronto-based Rogers made a $26-billion bid for Calgary-based Shaw and has also offered to sell Shaw’s Freedom mobile unit to allay competition concerns as part of the deal.
Deal provides ‘viable and sustainable’ competition, companies say
The Competition Bureau had said the sale would weaken Freedom’s operations, reducing “competitive discipline” among national carriers and lead to a transfer of wealth from low- and middle-income groups to the wealthy families of Rogers-Shaw.
“The parties strongly believe the agreement effectively addresses the concerns … regarding viable and sustainable wireless competition in Canada,” they said in the statement, referring to the reservations of the competition watchdog and the industry minister.
The companies will also provide transport services and roaming services to Quebecor as part of the deal.
“We look forward to securing the outstanding regulatory approvals for our merger with Shaw so that we can deliver significant long-term benefits to Canadian consumers, businesses and the economy,” said Rogers’ chief executive, Tony Staffieri.
Canadian law allows approval of mergers that harm competition if the companies can prove the mergers bring efficiency to the economy.