Globalive strikes Telus contract to boost odds of Rogers deal

Arrangement comes as Rogers tries to buy Shaw for $15.6B

Canadian investment firm Globalive Capital Inc. says it has struck an agreement with Telus Corp. to share mobile networks and spectrum — a move intended to boost Globalive’s effort to buy wireless assets from Rogers Communications Inc.

The arrangement comes as Rogers tries to acquire rival Shaw Communications Inc. for about C$20 billion ($15.6 billion) in one of Canada’s biggest mergers ever. The deal has antitrust problems, and Rogers has been negotiating with potential buyers of Shaw’s Freedom Mobile division in a bid to resolve them.

Globalive wants to buy Freedom Mobile, and the contract with Telus is designed to assure regulators and government officials that it will be able to offer a quality network that could compete with Canada’s larger wireless firms.

Under the deal, Telus and Freedom would share networks and spectrum in the three Canadian provinces — Ontario, Alberta and British Columbia — where Freedom currently operates, if Globalive is successful in acquiring it. It could be expanded to other regions of Canada over time, Globalive Chairman Anthony Lacavera said in an interview.

“It makes us a very compelling solution” for Freedom Mobile, he said.

Globalive has publicly offered C$3.75 billion for Freedom, but its discussions with Rogers have gone nowhere and it isn’t yet clear that Canada’s Competition Bureau or the government would approve its purchase of the country’s fourth-largest wireless player.

The bureau has sued to block the Rogers-Shaw merger, saying it’s worried that Freedom won’t be a strong competitor under new ownership. More than 85% of Canada’s wireless market is controlled by Rogers, Telus and BCE Inc., while smaller regional firms like Freedom have the rest.

Freedom Mobile is a business Lacavera knows well because he started the company, launching service in Canada in 2009 under the brand Wind Mobile. It was recapitalized in 2014 and Shaw agreed to buy it the next year.

Rogers’ auction for Freedom has produced other potential buyers — including Xplornet Communications Inc., which is backed by New York-based investment firm Stonepeak Partners LP, and the Aquilini family of British Columbia, which owns the National Hockey League’s Vancouver Canucks, among other business interests.

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