(Reuters) -Canada on Friday granted the final approval for Rogers Communications Inc’s C$20 billion ($15 billion) buyout of Shaw Communications Inc, clearing the deal that will create the country’s No. 2 telecoms company.
The green light for the deal came as Minister of Innovation, Science and Industry Francois-Philippe Champagne agreed to the transfer of wireless licenses held by Shaw’s Freedom Mobile unit to Quebecor Inc under some conditions.
Freedom Mobile’s proposed C$2.85 billion sale to Quebecor-owned Videotron has been crucial in addressing the antitrust concerns over the deal, given the overlap between Rogers and Shaw’s wireless divisions.
Champagne announced 21 conditions including that Videotron should offer plans that are at least 20% cheaper than competitors and invest C$150 million to upgrade Freedom Mobile’s network over the next two years.
He also restricted the transfer of Freedom Mobile’s licences for 10 years.
The Canadian government asked Rogers to set up a Western headquarters in Calgary and create 3,000 new jobs in Western Canada that must be maintained for at least 10 years, while investing C$5.5 billion to improve network services.
A breach of the commitments will lead to a fine of up to C$200 million for Videotron and C$1 billion for Rogers, Champagne said while announcing a freeze on all major licences transfers in the telecom sector.
The Roger-Shaw deal, struck in March 2021, will allow Ontario-focused Rogers to gain from Shaw’s strong presence in the sparsely populated regions of Western Canada and help it double down on its efforts to roll out 5G throughout the country.
The buyout had faced opposition from consumer advocates, politicians and rival telecom companies as it unites two major players in a market that already has some of the highest wireless bills in the world.
But Canada’s antitrust agency’s efforts to block the merger were rejected by the Competition Tribunal and a Canadian court, in what was seen as a test case for the regulator’s ability to improve consumer choices in a country where a handful of companies control large swaths of business.
The deal’s closing date has been delayed four times. It is the biggest in the Canadian telecoms industry since BCE’s spinoff of its stake in Nortel Networks in a transaction valued at C$88.7 billion in 2000.
Canada’s top telecom company by market value is BCE Inc.
U.S.-listed shares of Shaw were up 3% in premarket trading.
(Reporting by Juby Babu, Aditya Soni and Chavi Mehta in Bengaluru and Steve Scherer in Ottawa; Editing by Tom Hogue, Christian Schmollinger and Arun Koyyur)
