Rogers Communications Inc. has closed its $26-billion purchase of Shaw Communications Inc. after receiving final approval from Ottawa last week, bringing to an end two years of uncertainty as regulators scrutinized the deal.
“This is a momentous day for our customers, who will benefit from the latest services and network technology, and for our teams, who have worked so hard to get us here,” said Rogers CEO Tony Staffieri in a press release.
“We’re proud to bring together these two iconic companies to deliver more value, more connectivity, and more innovation for Canadians.”
Industry Minister Francois-Philippe Champagne gave the green light to the takeover on Friday by agreeing to the transfer of Shaw-owned Freedom Mobile’s wireless licences to Quebecor Inc.’s Videotron, the final regulatory step allowing the main deal to go ahead.
Rogers and Shaw agreed in June 2022 to sell Freedom Mobile to Videotron for $2.85 billion in an attempt to ease competition concerns raised by the original proposal. Freedom’s sale was also finalized on Monday.
In approving the deal, Champagne announced 21 conditions that Rogers and Videotron must adhere to, including Rogers establishing a second headquarters in Calgary and adding 3,000 new jobs based in Western Canada.
It must also spend $5.5 billion to expand 5G coverage and additional network services, as well as a further $1 billion to connect rural, remote and Indigenous communities.
Videotron must offer plans that are at least 20 per cent lower than its competitors and spend $150 million over the next two years to upgrade Freedom Mobile’s network.
If Rogers breaches its conditions, it must pay up to $1 billion in damages. Videotron would potentially be subject to $200 million in penalties if it fails to meet its commitments.
“We are very pleased to be closing the acquisition of Freedom Mobile today, bringing its Canadian footprint as well as the expertise and experience of its employees into our fold,” said Quebecor president and CEO Pierre Karl Péladeau in a press release.
“The alliance of Freedom and Videotron will permanently transform Canada’s wireless market for the benefit of consumers and create a new competitive environment that delivers innovative products and services at better prices.”
Champagne also announced his department would not allow any further transfers of wireless spectrum until it completes a review of Canada’s spectrum transfer framework.
Rogers first announced its deal to buy Shaw in March 2021 and the closing deadline has been pushed back numerous times since then. The deal was expected to close by April 7.
“Rogers and Shaw have been connecting Canadians for more than 50 years, and we’re thrilled to come together as one company to build on a shared legacy of investment, innovation, and entrepreneurship,” said Rogers chairman Edward Rogers in a press release.