Canada’s Competition Bureau has given the green light to the joint acquisition of handset retailer Glentel by telcos Bell Canada (BCE) and Rogers, having agreed firewalls among the parties to ensure ongoing competition.
BCE will pay C$594m – split…
Canada’s Competition Bureau has given the green light to the joint acquisition of handset retailer Glentel by telcos Bell Canada (BCE) and Rogers, having agreed firewalls among the parties to ensure ongoing competition.
BCE will pay C$594m – split evenly between cash and shares – for Glentel, and following the closing of that deal, sell 50% of the group to rival Rogers, which will pay BCE circa C$392m in cash. The total transaction is valued at C$670m including net debt and non-controlling interest.
A spokesperson for BCE said the company expected to close the Glentel deal on 20 May, with the subsequent sale to Rogers closing shortly afterwards.
Glentel was advised by Cannacord Genuity, while BCE and Rogers managed the deal internally.
BCE had originally agreed in November to acquire 100% of Glentel, prompting a legal challenge by Rogers to block the deal. BCE then agreed in December to a joint acquisition, leading Rogers to drop its application for an injunction.
To allay the watchdog’s competition concerns, all three parties agreed to erect administrative firewalls to prevent them from sharing competitively sensitive information, including subscriber information, pricing and promotional offers.
In this way, BCE and Rogers – two of the country’s top three telcos, alongside Telus – will not be able to share confidential information that could result in consumers paying higher prices for wireless products and services, or to obtain similar information from competitors also distributing through Glentel, the Competition Bureau said.
“The Bureau is confident that the agreement reached today will ensure that there will not be significant anti-competitive effects [arising from the] acquisition of Glentel. We are pleased that BCE and Rogers chose to work with [us] to find a solution that addresses the Bureau’s concerns,” said Jeanne Pratt, Senior Deputy Commissioner, Mergers and Monopolistic Practices.
Most of Glentel’s 359 Canadian stores only sell BCE and Rogers wireless products and services, the Bureau said. It also operates stores and points of sale in the US, Philippines and Australia. The company is listed, with 37% of its equity controlled by the Skidmore family.
