Canada Okays Rogers-Shaw Deal with Conditions

Canada on Friday approved Rogers Communications Inc's C$20 billion ($14.8 billion) buyout of Shaw Communications after securing binding commitments to pay financial penalties if it failed to create new jobs and invest to expand its network.

Reuters reports the final nod from Minister of Innovation, Science and Industry Francois-Philippe Champagne capped two years of antitrust uncertainty and paves the way for the creation of Canada's No. 2 telecoms firm in a market with some of the highest wireless bills in the world.

The deal was opposed by consumer advocates and politicians on worries it could lead to higher prices due to an overlap between Rogers and Shaw's wireless divisions.

On Friday, Champagne agreed to the transfer of wireless licenses held by Shaw's Freedom Mobile unit to Quebecor Inc-owned Videotron - a proposal that helped resolve antitrust concerns.

Champagne has secured a commitment from Videotron that it will offer plans at least 20% cheaper than competitors and invest C$150 million to upgrade Freedom Mobile's network in the next two years, or risk a fine of up to C$200 million.

Rogers reaffirmed its conditions, including setting up a western headquarters in Calgary, creating 3,000 new jobs in Western Canada and investing C$6.5 billion to upgrade connectivity. If it breaches the commitments, Rogers will have to pay a fine of as much as C$1 billion, Champagne said at a news conference in Ottawa.

The merger unites two of Canada's wealthy families whose companies have for long fought for market share.

Tony Staffieri, president and CEO of Rogers, said in a statement the company is "deeply" committed to delivering on its promises.