BCE, parent company to Bell’s wireless business, has entered into an agreement to purchase Manitoba-based MTS (Manitoba Telecom Services Inc.) for $3.9 billion. Montreal-based BCE will also assume the company’s outstanding debt of about $800 million.
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BCE said it would divest about one-third of Manitoba Telecom’s postpaid wireless subscribers to Telus Corp (T.TO) following the completion of the deal.
Bell has also agreed to open a western Canadian headquarters in Manitoba, which will employ 6,900 people (MTS now has 2,700 employees).
BCE claims that MTS tax losses depict a value of almost $300 million to Bell. Additionally, BCE will introduce a new Bell Let’s Talk Manitoba fund focused on mental health support for aboriginal communities chaired by Manitoban Clara Hughes, the national spokesperson for Bell Let’s Talk.
While often allies, the BCE and Manitoba Telecom have occasionally had a combative and competitive relationship.
At one time, BCE was a large shareholder of Manitoba Telecom and there was widespread speculation that it would buy full ownership of the company.
Bell is promising that MTS customers can expect faster internet within a year of the deal closing; as well as better smartphone service outside the city.
BCE (TSX:BCE) is offering $40 per share, about 45 per cent in cash and 55 per cent in stock, for the Winnipeg-based company’s shares (TSX:MBT). It will also have the opportunity to match any superior offer that may come forward.
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The transaction is expected to close in late 2016 or early 2017 pending regulatory approvals.
