Brad Shaw, president and chief executive of Shaw, said acquiring Wind would provide his Calgary-based company more than 940,000 customers who are mostly based in Ontario, British Columbia and Alberta. Shaw’s main customer base is in Alberta and B.C.
Such a purchase would enable Shaw to offer customers bundled services that include wireless, Internet, home phone and television services, and compete with top tier mobile players Rogers, Bell and Telus. Wind is Canada’s largest non-incumbent wireless services provider.
For Wind, being acquired by Shaw, could mean a longer lifeline. The cash-strapped, just like other smaller wireless players Public Mobile and Mobilicity that entered the scene some six years ago, has been struggling to gain market share against the market’s big three.
In 2014, Wind’s owner Vimplecom sold the company to Globalive about $135 million. The deal also required the buyer to assume $160 million of Wind’s debt.
New entrants are also slowly being gobbled up by the larger counterparts. In June this year, Industry Canada gave the green light to Rogers’ purchase of Mobilicity. Public Mobile was bought by Telus in 2013.
“This transaction represents a transformational step in the history of Shaw and we are excited about our future growth prospects in mobile,” Shaw said in a statement yesterday. “This growth will be accelerated by combining Shaw’s existing customer relationships, trusted brand and wireline and WiFi infrastructure with WIND’s impressive asset base, including its existing spectrum position and mobile network.”
Last week, Wind announced it had secured financing of $425 million from a syndicate of major Canadian banks to upgrade from 3G to a higher-speed LTE network. This would give it more capacity for the growing popularity of streaming video and music on mobile phones.
Mehr said Shaw still plans to roll out LTE across Wind’s network by the end of 2017.
Wind’s founder, Tony Lacaverra appeared to be happy about the impending acquisition.
— Tony Lacavera (@TonyLacavera) December 16, 2015
At least one “dragon” was glad to hear about the deal as well.
— Robert Herjavec (@robertherjavec) December 17, 2015
Alek Krstajic, chief executive officer of Wind, said he and his team with remain with the company.
We believe the combination of Shaw and Wind creates a wireless leader with immediate benefits for our customers and employees, giving them more choice, capabilities and opportunities to stay connected,” said Krstajic. “With Shaw’s long-term commitment, customer focus and breadth of product offering, this transaction enables us to enter into a new phase of growth.”
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