Canada’s Shaw Communications has completed its C$1.6bn (US$1.2bn) acquisition of the country’s fourth largest mobile operator Wind Mobile, adding wireless to its DTH, fibre, cable and WiFi offerings. The development comes as Shaw faces obstacles to the planned sale of its broadcasting unit to Corus Entertainment, proceeds of which it plans to use to fund the Wind Mobile deal.
Canada’s Shaw Communications (TSX:SJR.B) has completed its C$1.6bn (US$1.2bn) acquisition of the country’s fourth largest mobile operator Wind Mobile, adding wireless to its DTH, fibre, cable and WiFi offerings.
Shaw CEO Brad Shaw (pictured) said in a statement that his company is “excited about our growth prospects in mobile and welcomes the Wind team of 1,200 employees”.
“With the transformative power of this transaction, Shaw will become a leading pure-play connectivity provider,” he added.
The deal, which has seen Shaw take over Wind’s parent Mid-Bowline, was first announced in mid-December last year. Completion follows approvals by Mid-Bowline shareholders and Canada’s Competition Bureau and Ministry of Innovation, Science and Economic Development (formerly Industry Canada).
Wind has about 940,000 subscribers across Ontario, British Columbia and Alberta and some 50 MHz of spectrum in each of these regions. Shaw, which has a fibre network serving some 3.2 million customers and a DTH business serving 900,000 customers, said it will invest in upgrading the Wind network to 4G LTE. The mobile operator will be run as a separate entity and its management team will remain in place.
Shaw’s financial advisers on the transaction were CIBC World Markets and TD Securities, while Dentons Canada provided legal advice.
Shaw plans to use part of the proceeds of the sale of its broadcasting unit Shaw Media to Corus Entertainment for C$2.7bn (US$1.9bn) to fund the Wind purchase. In January, Shaw said that if the Wind deal closed before the Shaw Media sale, it would first draw on a fully committed bridge facility with the TD Securities and Canadian Imperial Bank of Commerce.
At the time, Shaw said it expected the Shaw Media sale to close in Q3; however, it has since run into obstacles. Corus investor Catalyst Capital has told regulators it has “serious concerns” about the deal and disagrees with Shaw’s assessment of the fair value of the broadcasting unit, local media reported. Corus shareholders are set to vote on the deal on 9 March.
Shareholder advisory firm Institutional Shareholder Services (ISS) has reportedly also expressed concerns about the deal. The US-based firm is, however, still recommending Corus shareholders approve it, saying the price appears fair.
Moody’s has warned that Shaw’s credit ratings could be affected if the Shaw Media sale is derailed.