Canada's Rogers Communications may have resuscitated its long-gestating plan to acquire rival Shaw Communications with a formal agreement announced Friday to sell Shaw's Freedom Mobile business to Videotron, a unit of Quebecor.

Under the terms of the new agreement, first unveiled in June, Quebecor would buy Freedom Mobile for around $2.85 billion Canadian dollars (US$2.2 billion). And that would presumably allay regulatory concerns currently blocking the proposed CA$26 billion ($20.6 billion) acquisition of Shaw by Rogers.

"This agreement with Quebecor brings us one step closer to completing our merger with Shaw," said Rogers CEO Tony Staffieri, in a release. "We strongly believe that this divestiture solution addresses the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry and we look forward to securing the outstanding regulatory approvals for our merger with Shaw so that we can start delivering its significant long-term benefits to Canadian consumers and businesses, including improved network resiliency."

Figure 1: (Source: Paul McKinnon/Alamy Stock Photo)

Canada's competition agency did not immediately respond to a request for comment, according to Reuters.

Rogers first announced its intentions to buy Shaw in May 2021, arguing that the transaction would allow it to speed up 5G rollout and create jobs, ultimately benefiting ordinary Canadians. But Shaw's ownership of Freedom Mobile was always a potential obstacle. Serving about 31 million mobile subscriptions, Bell Canada, Rogers and Telus already dwarf their rivals. A Rogers takeover of Shaw that includes Freedom Mobile and its 2 million customers would skew the market even more.

Canada's broadcasting agency, the Canadian Radio-television and Telecommunications Commission (CRTC), has already approved the combination of Rogers and Shaw. But the country's antitrust agency blocked the deal in May of this year.

As a result, Rogers reportedly has been shopping Freedom Mobile to the likes of Xplornet, Globalive Capital, Quebecor, Cogeco and Eastlink in order to save the deal. Quebecor, for its part, counted roughly 1.6 million mobile subscribers at the end of March 2022.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano