Rogers takeover of Shaw approved, with conditions

The federal government has approved the multibillion-dollar merger of telecom companies Rogers and Shaw, but with conditions that Ottawa insists will make the deal good for consumers.

François-Philippe Champagne, minister of innovation, science and industry, said at a news conference Friday that the government has approved the transaction first proposed in 2021.

As part of the deal, the vast majority of Shaw’s wireless business, Freedom Mobile, will be sold to Quebec-based Videotron. While Freedom Mobile and its more than two million customers will move over to Videotron, Rogers will maintain a much smaller part of Shaw’s wireless business, known as Shaw Mobile, which operates mostly in Alberta and B.C.

Those Shaw Mobile customers will be added to Rogers’ more than 10 million wireless customers across all of its brands, which includes Fido, Chatr and others.

The approval comes with 21 conditions that the government says are “legally enforceable,” including that Videotron will start to offer plans that are comparable to those currently available in Quebec and they can’t sell the wireless assets to anyone else for at least a decade.

Videotron must also:

  • Offer 5G service everywhere Freedom currently operates within two years.
  • Offer service in Manitoba via MVNO.
  • Increase the data allotments for existing Freedom customers by 10 per cent.

“Today, I am informing Canadians that I have secured on their behalf unprecedented and legally binding commitments from Rogers and Videotron. And, after imposing strict conditions, the spectrum licences of Freedom Mobile will be transferred to Videotron,” Champagne said.

Rogers chairman Edward Rogers, right, and Shaw CEO Brad Shaw, left, have been trying to finalize the merger of their two companies for more than two years. (David Kawai/Bloomberg)

While Shaw’s mobile business and its more than two million wireless customers will move to Quebecor, Rogers will take over Shaw’s media and cable assets, most of which are in Western Canada. But Champagne says those assets are also subject to numerous conditions.

They include a requirement to create 3,000 jobs in Western Canada, to spend billions to expand its broadband and wireless networks and to offer new lower cost plans to consumers in both.

“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, noting that Rogers is subject to financial penalties of up to $1 billion for non-compliance.

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