Minister approves Rogers’ $26 billion Shaw takeover

Innovation Minister François-Philippe Champagne has approved Rogers’ merger with Shaw and Vidéotron’s acquisition of Freedom Mobile.

Both agreements are subjected to multiple conditions.

Vidéotron has agreed to expand its 5G network in the area where Freedom Mobile already operates within a two-year period and provide plan options that are 20 percent cheaper than its major competitors. Data allotments for Freedom customers will also increase by 10 percent, and Vidéotron will expand its mobile services to Manitoba through a mobile virtual network operator (MVNO) agreement, offering residents what it offers Quebec.

The company previously agreed to offer plans that are comparable to the ones in Quebec and keep Freedom’s licenses for a 10-year period.

Rogers has committed to creating 3,000 new jobs in Western Canada and establishing a headquarters in Calgary. The company will also invest $1 billion in broadband internet access and 5G services where they currently aren’t available and increase its access to low-cost broadband internet plans and mobile plans for low-income Canadians. Rogers has also agreed to invest $2.5 billion in its 5G network in Western Canada and $3 billion in other projects to expand its network.

Vidéotron will be subjected to a fine of up to $200 million if it doesn’t comply with the agreements. Rogers’ fines amount to $1 billion.

“Should the parties fail to live up to any of their commitments, our government will use every means in our power to enforce the terms on behalf of Canadians,” Champagne said.

Rogers announced its plans to merge with Shaw more than two years ago. The company’s original plans included acquiring Freedom and its customers as it was under Shaw’s ownership. The companies agreed to sell the wireless provider to ease competition concerns.

Québecor owned Vidéotron was not initially part of talks to purchase Freedom. However, the companies agreed to an acquisition priced at $2.85 billion. It’s unclear how Rogers and Shaw decided on Vidéotron.

The Minister’s approval provides the third and final blessing for the merging companies. The Canadian Radio-television and Telecommunications Commission (CRTC) approved the broadcast aspects of the merger in March 2022. The Competition Bureau’s fight to block the merger ended with a dismissal from the Competition Tribunal.

The bureau’s fight revealed Rogers and Vidéotron entered into agreements to give Vidéotron access to Rogers’ networks. TekSavvy has argued the actions should not be allowed, and the CRTC is currently examining the matter.