Late Friday evening, Rogers, Shaw, and Quebecor jointly announced that they have reached an agreement in which Freedom Mobile will be sold to Quebecor, parent company of Videotron, on what they describe as a “cash-free, debt-free basis at an enterprise value of C$2.85 billion”, which they hope will allow them clear the final regulatory hurdle and allow the Rogers acquisition of Shaw to proceed.
The press release notes, “The parties strongly believe the agreement effectively addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry [sic] regarding viable and sustainable wireless competition in Canada.”
The sale includes all of Freedom Mobile branded wireless and Internet customers, its infrastructure, spectrum, and retail locations. In addition, Rogers and Shaw have agreed to provide transport services, including backhaul and backbone, as well as roaming services, to Quebecor.
The transaction is conditional, requiring clearance from both the Competition Bureau and Innovation, Science and Economic Development Canada (ISED) to proceed. Should it be approved, it is expected to close around the same time as the Rogers/Shaw transaction.
“This is a turning point for the Canadian wireless market,” said Pierre Karl Péladeau, president and chief executive officer of Quebecor, in a statement. “Quebecor’s Videotron subsidiary is the strong 4th player who, coupled with Freedom’s solid footprint in Ontario and Western Canada, can deliver concrete benefits for all Canadians. We have always believed that for there to be healthy competition in wireless services only a player with a proven track record can successfully enter the market. This is a value-added transaction for all consumers and the Canadian economy. After fifteen years of growth in the Quebec wireless market, we have demonstrated our expertise, our ability to innovate and our financial strength. Now we are taking another step to bring the opportunities our customers already enjoy to consumers across Canada.”