Rogers Communications Inc. says it will sell Freedom Mobile Inc. at Quebecor Inc. for $ 2.85 billion in a deal that hopes to allay concerns from federal regulators over its proposed acquisition of Shaw Communications.
The Competition Bureau has tried to block Shaw’s merger out of concern that it would substantially impede or reduce competition in wireless services.
Rogers, Shaw and Quebecor said in a statement Friday that they believe their agreement would effectively address these concerns and ensure the presence of a solid and sustainable fourth wireless carrier across Canada.
Under the terms of the agreement, Quebecor would purchase all of Freedom’s Internet and wireless customers, as well as Freedom’s entire infrastructure, spectrum and retail locations to an extent that would expand Quebecor’s wireless operations. at the national level.
The agreement is subject to regulatory approval.
Tony Saffieri, president and CEO of Rogers, says the deal with Quebecor to divest Freedom is a critical step in completing its proposed merger with Shaw.
“We strongly believe that the divestment will meet the Government of Canada’s goal of a solid and sustainable fourth-party wireless service provider,” Saffieri said in a statement.
“This proven agreement between cable and wireless companies will ensure the continuation of a highly competitive market with robust future investments in Canada’s world-class networks.”
Edward Rogers, president of Rogers Communications, said the deal is a solution that would benefit Canadians by increasing competition and choice and enabling the transformative benefits of a combination of Rogers and Shaw.
The Rogers-Shaw transaction announced in March has been approved by Shaw shareholders and the Canadian Radio-television and Telecommunications Commission. It remains subject to review by the Competition Bureau and the Minister for Innovation, Science and Industry.
Earlier on Friday, the Competition Bureau extended its opposition to Rogers’ proposed $ 20 billion acquisition of Shaw Communications in new submissions to the Competition Court ahead of the hearings scheduled for this fall.
In legal documents released after the markets closed, the agency challenged Rogers’ claims about efficiency and said the acquisition of its nearest competitor is anti-competitive that would harm consumers through higher prices, services of lower quality and lost innovation.
He also argues that the proposed sales of Shaw’s Freedom Mobile service “are not an effective remedy” because it will not replace the growing competition that Shaw Mobile would offer in Alberta and British Columbia and make Freedom Mobile “a later weaker competitor” than it would have been. except for treatment.
The office said the efficiencies Rogers claims will create the deal are insufficient to offset and offset the anti-competitive effects and are “speculative, unproven and unlikely to be achieved … or are greatly exaggerated.” unrealistic hypotheses and flawed methodologies ”.
The Competition Bureau also said that a further price increase would lead to the transfer of wealth from low- and moderate-income groups to shareholders, including ultra-rich members of the family groups of companies.
Five weeks of hearings are scheduled to begin the week of November 7, followed by written and oral arguments.