By Ketki Saxena
Investing.com – Canadian Industry Minister François-Philippe Champagne has approved Rogers Communications Inc (TSX:RCIa).’s $20-billion takeover of rival telecom Shaw Communications (TSX:SJRb), ending the two-year saga of Rogers trying to acquire one of its largest rivals.
Rogers first struck the agreement to buy Shaw for $20 billion in March 2021.
The sale is expected to close on April 7.
The deal has faced significant opposition from regulators alleging the deal will materially reduce competition in Canadian telecoms, and increase prices for consumers.
Champagne, while approving the deal, has also laid out stringent conditions for the companies, with fines of up to $1 billion if the companies violate them.
The Industry minister noted that the government would “use every means in our power” to enforce the terms of the sale if the companies do not adhere to the conditions.
The conditions on Rogers include a series of stipulations to improve connectivity over the next five years.
Those include creating 3,000 jobs in Western Canada and maintaining them for at least 10 years; $1 billion to expand broadband internet access and 5G mobile service where it isn’t currently available; $2.5 billion to to enhance its 5G network in Western Canada, and $3 billion invested on other network service expansion projects.
Rogers will also be mandated to set up a low-cost mobile plan for low-income Canadians
The Roger-Shaw takeover deal is also contingent on Shaw selling its Freedom Mobile wireless business to Quebecor’s Videotron.
Champagne’s condition for the sale of Videotron includes a mandate to offer plan options that are at least 20% less expensive han those offered by other major players and increase data allotments for Freedom Mobile customers by 10% as it brings down prices. Videotron will also be unable to transfer the Freedom Mobile licenses for 10 years and to expand service into Manitoba with similar plans to its Quebec offerings.