Rogers Communications Inc鈥檚 $26-billion takeover of Shaw Communications Inc. cleared the final regulatory hurdle Friday, more than two years after the deal was first announced.
Federal Industry Minister Fran莽ois-Philippe Champagne approved the transfer of Shaw-owned Freedom Mobile鈥檚 wireless licences to Quebecor Inc.鈥檚 Videotron, which operates in Quebec and some border regions of Ontario., paving the way for the deal to be completed.
Rogers announced its deal to buy Shaw in March 2021 and the deadline to close the deal has been pushed back numerous times. The three companies said Friday they expected to complete the transaction by April 7.
Champagne said Ottawa has secured 21 legally enforceable commitments from Rogers and Videotron to bolster competition in the sector and 鈥渁ctually drive down prices.鈥�
Rogers and Shaw had agreed in June 2022 to sell Freedom Mobile to Videotron for $2.85 billion in an attempt to ease competition concerns raised by the original proposal.
Champagne had stipulated that he would 鈥渆xpect to see鈥� Freedom鈥檚 wireless prices in Ontario and Western Canada lowered by about 20 per cent over, putting them in line with Videotron鈥檚 current Quebec offerings.
In response, Videotron said it would accept the conditions, agreeing to incorporate them in a revised deal.
On Friday, the minister said Ottawa鈥檚 conditions 鈥渟hould not be taken lightly.鈥� He said they would ensure a 鈥渇ourth national player can go toe-to-toe with the Big Three and actually drive down prices.鈥�
The conditions include Rogers establishing a second headquarters in Calgary and adding 3,000 new jobs based in Western Canada 鈥渋n the coming months鈥� which it must maintain for at least 10 years.
It must also spend $5.5 billion to expand 5G coverage and additional network services, as well as a further $1 billion to connect rural, remote and Indigenous communities.
Videotron must offer plans that are at least 20 per cent lower than its competitors and spend $150 million over the next two years to upgrade Freedom Mobile鈥檚 network. It is restricted from transferring any Freedom Mobile licences for a decade.
The minister also announced his department would launch a review of Canada鈥檚 spectrum transfer framework, noting one has not been conducted in nearly a decade.
Champagne vowed to 鈥渂e like a hawk on behalf of Canadians鈥� to ensure the companies adhere to the conditions.
鈥淢ake no mistake. We will be monitoring their performance under these terms and conditions and making sure that we enforce the terms of these contracts on behalf of Canadians,鈥� he said.
Asked how he will enforce the conditions, the minister told reporters, 鈥淚鈥檓 a lawyer and it鈥檚 a contract,鈥� before adding that the deal is subject to arbitration.
鈥淚 would not mess with the regulator,鈥� he said. 鈥淚t鈥檚 never a good thing, not only if you have a contract with conditions, but on top of that, just think about the penalties.鈥�
If Rogers breaches its conditions, it must pay $1 billion in damages, the minister said. Videotron would be subject to $200 million if it fails to meet its commitments.
鈥淚f Canadians do not begin to see clear and meaningful reduction in prices within a reasonable amount of time, I will have no choice but to seek further legislative and regulatory powers to drive down prices in Canada,鈥� Champagne said.
In January, the Federal Court of Appeal rejected the Competition Bureau鈥檚 bid to quash the deal.
The regulator, which had argued that approving the merger would reduce competition and result in higher cellphone bills, poorer service, and fewer options for consumers, had hoped the higher court would overturn a previous ruling from the Competition Tribunal in favour of the pact.
Instead, the court sided with the tribunal鈥檚 view that 鈥渢here was no substantial lessening of competition鈥� at risk by approving the deal.
The companies had previously tried to solve the impasse with the Competition Bureau via mediation through last summer and fall, but that process was unsuccessful. Rogers and Shaw had agreed not to close their deal until either reaching a negotiated agreement with the regulator or a ruling from the Competition Tribunal.
Clearing another regulatory obstacle, the Canadian Radio-television and Telecommunications Commission (CRTC) approved Rogers鈥� acquisition of Shaw鈥檚 broadcasting services in March 2022 subject to certain conditions.
That included a requirement for Rogers to contribute $27.2 million to various initiatives and funds, five times what the company had originally proposed.
The CRTC, which was only tasked with assessing broadcasting elements of the transaction, said 80 per cent of that sum must be directed to the Canada Media Fund, the Independent Local News Fund and certified independent production funds.
Rogers must also create an Indigenous news team with journalists in all provinces where the company provides news content to deliver stories to First Nations, M茅tis and Inuit communities.
As part of the agreement, Rogers will acquire 16 cable services based in Western Canada, a national satellite television service and other broadcast and television services.
Earlier this month, Champagne told reporters 鈥淚鈥檓 the holdup鈥� when asked about the agreement鈥檚 constantly shifting deadline.
鈥淢y mission has been that this undertaking is to drive down prices. That鈥檚 the only thing that was the driving force behind it. That鈥檚 why it took so long,鈥� he said Friday.
He told reporters that the Liberal government has 鈥渃hanged the game鈥� for telecommunications companies in Canada, but promised 鈥渢his is not the end of it.鈥�
鈥淚f we don鈥檛 see prices coming down 鈥� I鈥檒l be seeking additional power to make sure that we drive down prices and at that time, everything is on the table,鈥� he said.
鈥擲ammy Hudes, The Canadian Press
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