Quebecor Completes Purchase of Freedom Mobile from Shaw
Quebecor and Shaw announced on Monday morning the completion of the acquisition of Freedom Mobile by Videotron, a wholly-owned subsidiary of Quebecor, “creating the fourth strong, competitive wireless service provider that Canadian consumers and governmental and regulatory authorities have been waiting for.”
Rogers has also completed its acquisition of Shaw this morning as well (more to come).
This acquisition means Freedom and Videotron now have a combined total of more than 3.5 million customers for mobile services alone, which could lead to further disruptions in the country’s wireless market, say both companies.
Quebecor’s CEO, Pierre Karl Péladeau, said in a statement “the alliance of Freedom and Videotron will permanently transform Canada’s wireless market for the benefit of consumers and create a new competitive environment that delivers innovative products and services at better prices.”
Canadians will have to wait and see about that.
To provide immediate benefits for Canadian consumers, Videotron has promised to ensure that Freedom’s plans will be at least 20% more affordable than the equivalent plans offered by the incumbents in the British Columbia, Alberta, and Ontario markets over a period of ten years.
The company will maintain prices for Freedom’s existing customers for five years and will invest more than $150 million to upgrade Freedom’s infrastructure. Videotron has also committed to keeping Freedom’s spectrum licenses for at least 10 years after they are transferred.
Brad Shaw, Executive Chair and Chief Executive Officer of Shaw, said that with these assets under Quebecor’s leadership, Canadians will continue to benefit from increased wireless competition, investment, and affordability.
The acquisition was completed on the basis of an enterprise value of $2.85 billion. Videotron paid $2.17 billion in cash and assumed certain debts, primarily lease obligations. The cash consideration was financed in part through a new $2.1 billion secured term credit facility of Videotron.
Quebecor has also settled a commercial dispute with Rogers related to a shared 4G/LTE network in Quebec and the Ottawa area.
Soon, Videotron will be able to offer British Columbia, Alberta, Manitoba, and Ontario “attractive multi-service bundles” for wireless, internet and TV within the next few months, thanks to Quebecor’s recent acquisition of VMedia.
Innovation, Science, and Industry Minister François-Philippe Champagne approved the Rogers-Shaw merger on Friday and said that “Competition in the Canadian wireless market will only get stronger as a result of this transaction, which is good news for Canadians across the country.” Critics believe otherwise, noting the consolidation of telecoms in the country will result in higher prices and less competition.