Canadian authorities have finally approved Rogers Communications' CAD$26 billion (US$19 billion) takeover of telecom rival Shaw, ending a two-year discussion in one of the largest corporate tie-ups in the nation's history.
Minister of Innovation, Science and Industry Francois-Philippe Champagne lifted his objections to the merger and emphasized how this arrangement aims to create a “new national fourth player” in the telecom industry to increase competition and bring down mobile phone and Internet costs for Canadians.
The historic merger is set to proceed after securing the transfer of wireless spectrum licenses from Shaw's Freedom Mobile to Quebec-based Videotron.
In a news conference, Champagne shared the message he hears from Canadians everywhere he goes: “We pay way too much for telecom services, and we want more options.” Thus, he officially stated that they will continue to “ensure the industry meets these standards, including improving competition, reliability and affordability.”
"The way to drive down prices is true competition," he said, citing 21 conditions imposed on the companies involved that would "ensure that a new fourth national player can go toe to toe with the Big Three and actually drive down prices."
The original takeover deal, struck in March 2021, faced strong opposition across the sector.
Rogers will acquire all issued and outstanding Shaw shares for a total of CAD$20 billion, a company spokesperson confirmed to AFP.
“We are very pleased to move forward with this transformative merger and proudly deliver on our commitments to enhance and expand network coverage, connect underserved communities and improve access for low-income Canadians,” said Tony Staffieri, president and CEO at Rogers. “Building on a shared legacy with Shaw, we will invest substantially to bring more choice, more value and more connectivity to Canadians across the country.”
Rogers will gain a stronger presence with the merger in Western Canada, where Shaw’s footprint dominates.
Executive Chair and CEO Brad Shaw added, “In today’s telecommunications industry, we recognize that companies need even greater scale to compete and make ongoing investments for future technology. This merger will provide the scale necessary for the future success and competitiveness of the wireline business that Shaw has built over the past five decades.”
Quebec-based Videotron, by effectively assuming Shaw's wireless business in a side deal, will be able to expand its mobile services nationwide and compete with Rogers-Shaw, Telus and Bell Canada.
If Rogers-Shaw and Videotron break any of the agreed-upon commitments, they could be liable for penalties of up to CAD$1 billion (US$750 million).
Champagne has also highlighted enforcing “further legislative and regulatory powers” if Canadians do not begin to see a clear and meaningful reduction in prices within a reasonable amount of time as a result of this decision.