Canada Approves Rogers-Shaw Deal with Binding Conditions
Canada has given approval to Rogers Communications’ CAD20 billion ($14.8 billion) acquisition of Shaw Communications after securing binding commitments from both companies to pay financial penalties if they failed to invest to expand their network and create new jobs. The deal will create Canada’s second-largest telecoms firm, despite consumer advocates and politicians expressing concerns that the merger could result in higher prices due to the overlap between the wireless divisions of Rogers and Shaw. Innovation, Science and Industry Minister Francois-Philippe Champagne secured a commitment from Quebecor-owned Videotron, who is acquiring Shaw’s Freedom Mobile unit, to offer plans at least 20% cheaper than competitors and invest CAD150 million in upgrading Freedom Mobile’s network in the next two years, or face a fine of up to CAD200 million. If Rogers breaches the conditions, the company could face a fine of up to CAD1 billion. The deal is set to close on April 7th, following its fifth delayed completion date.