TORONTO — In early June, a merger between a grandfathered multimedia giant and Shaw Communications — valued at $20.02 billion in U.S. dollars — was halted. The blockbuster deal, which was initially announced in mid-March 2021, would have combined Calgary-based Shaw and its predominantly Western Canada media assets with a company founded 59 years ago by the late Ted Rogers.
Canada’s competition bureau put a stop to the transaction. Rogers Communications and Shaw then agreed not to proceed with closing their deal until either a negotiated settlement is approved with the Commissioner or the Competition Tribunal has ruled on the matter.
On Friday, a major move designed to get the Competition Bureau in Ottawa to say yes to the marriage transpired.
Rogers and Shaw agreed to divest Freedom Mobile to Quebecor.
The transaction is valued at approximately $2.192 billion USD, and provides the Montréal-based Quebecor with a bigger footprint in Ontario, Alberta and British Columbia. In Québec, Quebecor operates the long-standing Videotron subsidiary.
“Our agreement with Quebecor to divest Freedom is a critical step towards completing our proposed merger with Shaw,” said Tony Staffieri, President and CEO of Rogers. “We strongly believe the divestiture will meet the Government of Canada’s objective of a strong and sustainable fourth wireless services provider. This agreement between proven cable and wireless companies will ensure the continuation of a highly competitive market with robust future investments in Canada’s world class networks. We look forward to securing the outstanding regulatory approvals for our merger with Shaw so that we can deliver significant long-term benefits to Canadian consumers, businesses and the economy.”
With $1.98 billion CDN in 2021 revenue, Rogers’ Media arm includes radio and TV broadcasting, the Toronto Blue Jays Major League Baseball franchise, and a 12-year exclusive National Hockey League licensing agreement in Canada. It also owns the Rogers Centre (formerly Skydome), and holds a 37% interest in Maple Leaf Sports & Entertainment, which owns the Toronto Maple Leafs, the Toronto Raptors, Toronto FC, the CFL’s Toronto Argonauts, and the Toronto Marlies, a popular minor league hockey franchise.
Quebecor is the owner of TVA News, tabloids Journal de Montréal and Journal de Québec, and digital radio service QUB.
As of 11am Eastern, Rogers’ Class B shares were up by 6.8% on the TSX, to $63.02 CDN. This erases a dip seen since June 8.
— Reporting by Adam Jacobson, with assistance from Carina Newton in North York, ON.
