Rogers, Shaw, Quebecor sign definitive agreement for Freedom sale

The agreement is "substantially consistent" with the terms announced in June

Freedom Mobile

In a news release published the morning of August 12th, Rogers, Shaw, and Quebecor said they had signed a definitive agreement for the sale of Freedom Mobile.

According to the companies, the agreement is “substantially consistent” with the terms previously announced in June. The deal will see Shaw and Rogers sell Freedom Mobile to Quebecor subsidiary Vidéotron for $2.85 billion, conditional on regulatory approval of the Rogers-Shaw merger.

In the release, the three companies said they “strongly believe” selling Freedom will provide “the best opportunity to create a strong fourth national wireless services provider and addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry, [François-Philippe Champagne,]” over the Rogers-Shaw merger.

Additionally, the release reiterated Quebecor’s past commitment to leverage the combined businesses of Vidéotron and Freedom to launch a national 5G offering with the former’s 3500MHz spectrum holdings.

Along with being conditional on the Rogers-Shaw merger, it’s worth noting that the Freedom sale would also be dependent on clearance under the Competition Act, as well as approval from Minister Champagne.

As for the Rogers-Shaw merger, it has already been approved by Shaw shareholders, the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission (CRTC). However, it remains subject to review by the Competition Tribunal and approval from Minister Champagne.

It’s worth noting that the Commissioner of Competition filed to block the merger in May, which led to the Competition Bureau, Rogers, and Shaw participating in tribunal mediation, although those mediation efforts failed in July.

However, if the Rogers-Shaw merger goes through and Vidéotron acquires Freedom Mobile, that will only resolve one of the multiple competition concerns with the merger. Along with wireless networks (which the Freedom deal would impact), there are concerns about combining Shaw’s internet and broadband services with Rogers. Those concerns have grown following the massive nationwide Rogers network outage on July 8th (dubbed ‘Red Friday’ by some).

Update 2022/08/12 at 12:58pm ET: Globalive founder and chairperson Anthony Lacavera called the agreement to sell Freedom to Vidéotron  “artificial competition” in a statement about the announcement:

“Today’s announcement by Rogers is the latest in a long series of artificial competition proposals put forward to keep wireless prices high at the expense of Canadians, many of whom are already struggling with inflation. Fortunately, our government is conducting a thorough investigation and I am confident they will continue to intervene to create a truly competitive wireless and telecom industry.”

Lacavera founded Wind Mobile and sold it to Shaw in 2016 — Shaw rebranded it to Freedom Mobile. Now, Lacavera’s trying to reacquire the wireless provider but said Rogers refused to engage with his $3.75 billion offer for Freedom. In early June, Lacavera took the offer straight to Shaw. At the end of June, Lacavera asked regulators to block the Vidéotron acquisition, saying Rogers was choosing a “weaker competitor over a stronger one.”

Source: Rogers

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