Quebecor closes acquisition of Freedom Mobile
Quebecor Inc., has announced that the acquisition of Freedom Mobile Inc., by Videotron Ltd., a wholly-owned subsidiary of Quebecor, has been completed, creating the fourth wireless service provider in Canada. With a combined total of more than 3.5 million customers for mobile services alone and the expertise of nearly 7,500 employees, Freedom and Videotron have the leverage to further disrupt Canada’s wireless market.
“We are very pleased to be closing the acquisition of Freedom Mobile today, bringing its Canadian footprint as well as the expertise and experience of its employees into our fold,” says Pierre Karl Péladeau, president and CEO of Quebecor. “The alliance of Freedom and Videotron will permanently transform Canada’s wireless market for the benefit of consumers and create a new competitive environment that delivers innovative products and services at better prices.”
“Today marks the beginning of a new era for Canadians,” Péladeau says. “Joining Videotron’s track record of success in Quebec with Freedom’s highly skilled teams will bring our customers the benefit of our combined expertise and our unwavering customer-centric focus. Finally, we also want to thank Shaw and Rogers for their ready cooperation throughout this process, which is so important to Canada’s economic future.”
“We are incredibly proud of what our team has accomplished in the past several years to make Freedom Mobile a strong competitor in British Columbia, Alberta, and Ontario,” says Brad Shaw, executive chair and chief executive officer, Shaw. “We are confident that, with these assets under Quebecor’s leadership, Canadians will continue to benefit from increased wireless competition, investment and affordability.”
Immediate benefits for Canadian consumers
Determined to lower prices for the benefit of Canadians, Videotron has promised the François-Philippe Champagne, minister of innovation, science and industry, that it will, among other things:
- Ensure that over a period of ten years, Freedom’s plans will be at least 20% more affordable than the equivalent plans currently offered by the incumbents in the British Columbia, Alberta and Ontario markets;
- Maintain prices for Freedom’s existing customers for five years. Existing Freedom customers will also automatically receive a 10% increase in their local data limit at no additional cost. In addition, Freedom will participate, within its wireline footprint, in the Connecting Families initiative available to low-income Canadian families and seniors, as Videotron already does;
- Invest more than [$150 million (€137.41 million)] to upgrade Freedom’s infrastructure, which will, among other things, enable 90% of its customers to access the 5G network using a compatible device within two years. Quebecor has also committed to keeping Freedom’s spectrum licences for at least 10 years after they are transferred.
With the recent acquisition of independent telecom provider VMedia Inc., Videotron will be able to offer Canadians in British Columbia, Alberta, Manitoba, and Ontario attractive multi-service bundles including not only wireless, but also internet and television services, within the next few months.
Transaction details
The acquisition was completed on the basis of an enterprise value of [$2.85 billion (€2.61 billion)]. Videotron paid [$2.17 billion (€1.99 billion)] in cash and assumed certain debts, primarily lease obligations. The consideration paid is subject to certain post-closing adjustments. The cash consideration was financed in part through a new [$2.1 billion (€1.92 billion)] secured term credit facility of Videotron entered into with a syndicate of financial institutions, consisting of three equal tranches maturing in October 2024, April 2026 and April 2027.
Settlement between Videotron and Rogers
Videotron and Rogers have also settled a commercial dispute related to a shared 4G/LTE network in Québec and the Ottawa area. The companies remain committed to continuing this agreement and investing in the joint network for the benefit of their respective customers.
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