Rogers takeover of Shaw set to go ahead with Industry Minister’s approval of Freedom Mobile deal

Federal Industry Minister François-Philippe Champagne is planning to approve the transfer of Shaw Communications Inc.’s SJR-B-T Freedom Mobile to Quebecor Inc. QBR-B-T with conditions on Friday morning, paving the way for Rogers Communications Inc. RCI-B-T to complete its $20-billion takeover of Shaw.

Mr. Champagne is scheduled to hold a news conference at 8:30 a.m. regarding the competitiveness of Canada’s telecom industry, the government announced late Thursday. A source with knowledge of the announcement said the minister is planning to approve the transfer of Shaw’s wireless licences to Quebecor’s Videotron Ltd. with a number of conditions attached, as well as financial penalties associated with breaking those conditions. The Globe is not identifying the individual because they are not authorized to speak publicly about the matter.

The takeover of Shaw by Rogers, which would combine Canada’s two largest cable networks, was first announced two years ago. In order to prevent the deal from eliminating Canada’s fourth-largest wireless carrier, Rogers and Shaw have agreed to sell Freedom Mobile to Quebecor for $2.85-billion.

In recent weeks, Rogers and Quebecor have been working with Ottawa to iron out the details of their promises to maintain the affordability and accessibility of wireless services, including the penalties they would face if they broke those pledges, after the three-way deal is consummated.

The Globe previously reported that Mr. Champagne was asking for written undertakings that Quebecor would reduce wireless prices and that Rogers would fulfill its commitment to spend $1-billion rolling out high-speed internet to rural, remote and Indigenous communities.

The negotiations between the telecoms and the federal government have also included discussions about reducing the domestic roaming rates that are charged when Freedom Mobile customers roam on the Rogers network, The Globe has reported.

Mr. Champagne’s approval is the final regulatory hurdle for the takeover, which has faced numerous delays and regulatory setbacks, including vigorous opposition from the Competition Bureau, an independent law enforcement agency.

However, the watchdog’s opposition to the takeover was dismissed late last year by the Competition Tribunal, a quasi-judicial body that adjudicates cases brought by the bureau, after a month-long hearing that included testimony from more than 40 witnesses.

The tribunal determined that the takeover, with the divestiture of Freedom to Videotron, was likely to create a “more aggressive and effective” wireless competitor. Acquiring Freedom, which serves 1.7 million customers in Ontario, Alberta and British Columbia, would double the size of Videotron’s customer base and allow it to expand beyond its home market of Quebec.

The transfer of Shaw’s broadcasting business to Rogers won the blessing of the Canadian Radio-television and Telecommunications Commission a year ago, in March of 2022.