Rogers Communications Inc. says it will sell Freedom Mobile to Quebecor

Rogers Communications Inc. says it will sell Freedom Mobile Inc. to Quebecor Inc.

for $2. 85 billion in a deal it hopes will appease the concerns of federal regulators about its proposed takeover of Shaw Communications. The Competition Bureau has been seeking to block the Shaw merger over concerns it would substantially prevent or lessen competition in wireless services.

Rogers, Shaw and Quebecor say in a release Friday that they believe their agreement would effectively address those concerns and ensure the presence of a strong and sustainable fourth wireless carrier across Canada. Under the terms of the agreement, Quebecor would buy all of Freedom’s branded wireless and internet customers as well as all of Freedom’s infrastructure, spectrum and retail locations in a move that would expand Quebecor’s wireless operations nationally. The deal is subject to regulatory approval.

Tony Staffieri, president and CEO of Rogers, says the agreement with Quebecor to divest Freedom is a critical step toward completing its proposed merger with Shaw. “We strongly believe the divestiture will meet the Government of Canada’s objective of a strong and sustainable fourth wireless services provider,” Staffieri said in a release. “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.

” Edward Rogers, chairman of Rogers Communications, said the agreement is a solution that would benefit Canadians by delivering increased competition and choice and enable the transformative benefits of a combined Rogers and Shaw. The Rogers-Shaw transaction announced in March has been approved by the shareholders of Shaw and the Canadian Radio-television and Telecommunications Commission. It remains subject to review by the Competition Bureau and the Minister of Innovation, Science and Industry.

RELATED: Competition Bureau doubles down on objections to Rogers deal for Shaw Earlier Friday, the Competition Bureau expanded its opposition to Rogers’ proposed $26-billion takeover of Shaw Communications in new submissions to the Competition Tribunal ahead of weeks of hearings scheduled to being this fall. In legal filings released after markets closed, the agency challenged Rogers’ claims about efficiencies and said acquiring its closest competitor is anticompetitive that would harm consumers through higher prices, lower quality services and lost innovation. It also argues that the proposed sales of Shaw’s Freedom Mobile service is “not an effective remedy” because it won’t replace growing competition Shaw Mobile would deliver in Alberta and British Columbia and would make Freedom Mobile “a subsequently weaker competitor” than it would have been except for the deal.

The bureau said the efficiencies Rogers claims the deal will create are insufficient to outweigh and offset the anticompetitive effects and are “speculative, unproven and unlikely to be achieved … or are grossly exaggerated. ” It says stated efficiencies are based on “unrealistic assumptions and flawed methodologies. ” The Competition Bureau also said a subsequent increase in prices would result in the transfer of wealth from low- and moderate-income groups to shareholders including ultrarich members of family ownership groups of the companies.

Five weeks of hearings are scheduled to begin the week of Nov. 7, followed by written and oral arguments. Rogers Communications is the parent company of this website.