Rogers said it was set to pay approximately $357 million for Mobilicity, with the purchase subject to approval by a bankruptcy court and government regulators.
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Rogers said it expects to acquire $175 million in tax losses, which can be claimed this fiscal year and offsets the price tag for Mobilicity.
Rogers (TSX: RCI.B) will also sell some spectrum to Wind Mobile, which has emerged as one of the leading challengers to Canada’s three biggest wireless companies.
“The transaction with Rogers provides the best possible outcome for Mobilicity’s customers, dealers and employees”, said Anthony Booth, President of Mobilicity, in a statement. Reportedly, Rogers Communications has agreed to shell out C$400 million ($324.57 million) for the acquisition.
Meanwhile, Rogers Communications is striving to strengthen its foothold in the Canadian telecom sector through increased smartphone penetration, wireless customer gain, average revenue per unit improvement, wire-line fiber-optic network expansion, wireless data service enhancement and strategic acquisitions.
Rogers will also be exercising its outstanding option to acquire the unused spectrum of Calgary-based Shaw Communications Inc., which purchased airwaves in 2008, but has made no secret that it has no intentions of pursuing a strategy in wireless market.
Court filings state a portion of the purchase price will be loaned by Rogers to Mobilicity to repay, in full, the company’s secured creditors, with the exception of the secured obligations held by Toronto-based private equity firm Catalyst Capital Group Inc.
Wind Mobile CEO Alek Krstajic said, “This will significantly improve our network performance from Ontario to the Pacific, enabling us to deploy new technology and accelerate the development of our LTE network and other services”.
Of these 18 licenses, Rogers will only keep two, transferring the other 16 to Wind, and acquire some of Wind’s current spectrum as part of the transaction.
“We’re pleased to have worked with the government to put this unused valuable resource to work”, said Laurence. Industry Canada has already given the green light to the various transactions.
Rogers’ deals will give it new airwaves in British Columbia, Alberta and southern Ontario, among Canada’s most populated regions.
Meanwhile, this is the fourth bid from TELUS for the domestic wireless carrier, following back-to-back government opposition related to the transfer of Mobilicity’s spectrum license.
But Aziz said his recent interaction with Industry Canada left him with the impression the government agency no longer has the same concerns it once did about spectrum concentration among a small number of Canadian wireless carriers.
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