Canada's Shaw Buys Wind for $1.16B

Canada's Shaw Communications has agreed to buy wireless operator Wind Mobile in a C$1.6 billion (US$1.16 billion) deal that will take the fixed-line player into the mobile sector.

The takeover would mark the latest example of the convergence trend that is sweeping telecom markets globally, with operators under competitive pressure to develop the full portfolio of fixed and mobile communications services.

Wind Mobile launched operations as recently as 2008 but has become Canada's fourth-biggest mobile operator -- behind Rogers Communications Inc. (Toronto: RCI), Telus Corp. (NYSE: TU; Toronto: T) and BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), or the "big three," as they are sometimes known -- with about 940,000 customers across Ontario, British Columbia and Alberta.

This year, it is expected to generate about US$485 million in revenues and US$65 million in net profit.

"The global telecom landscape is quickly evolving towards 'mobile-first' product offerings as consumers demand ubiquitous connectivity from their service providers," said Brad Shaw, the CEO of Shaw Communications Inc. , in a company statement. "The acquisition of Wind … will allow us to offer a converged network solution to our customers … including fiber, cable, WiFi and now wireless."

Under the ownership of Mid-Bowline Group -- whose parents include a number of investment firms -- Wind has been able to grow its customer base by 47% during the past two years. But it has lacked the resources and fixed-line service capability of its bigger rivals, which collectively serve more than 26 million mobile customers, and caters mainly to the less lucrative prepaid segment of the mobile market.

Shaw currently has about 3.2 million customers on its fiber network and generated revenues of approximately C$5.5 billion (US$3.98 billion) in the year ending in August.

It owns the Global Television and a variety of other TV networks and offers broadband, TV, WiFi and managed cloud services to customers in the residential and business sectors.

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

Wind CEO Alek Krstajic, who will remain in charge of wireless operations following the acquisition, said a merger with Shaw would give customers "more choice, capabilities and opportunities to stay connected."

Shaw points out that Wind also controls 50MHz of spectrum in each of the three regions of Ontario, British Columbia and Alberta and is investing in improvements to its mobile broadband capabilities.

The fixed-line player has executed a bridge financing facility with the Toronto Dominion Bank and the Canadian Imperial Bank of Commerce to fund its latest move.

It expects the deal to close in the third quarter of 2016 subject to approvals from regulatory authorities.

— Iain Morris, , News Editor, Light Reading