Shaw Communications (TSX:SJR.B) is entering the Canadian wireless arena with its announcement it intends to buy Wind Mobile Corp. for $1.6 billion.
The transaction will give Shaw access to Wind’s 940,000 subscribers in British Columbia, Alberta and Ontario, as well as 50MHz of spectrum in each of those three provinces.
Brad Shaw, CEO of Shaw, calls the move a “transformational step” in the company’s history.
“The global telecom landscape is quickly evolving towards 'mobile-first' product offerings as consumers demand ubiquitous connectivity from their service providers,” the CEO said in a release.
“The acquisition of Wind provides Shaw with a unique platform in the wireless sector which will allow us to offer a converged network solution to our customers that leverages our full portfolio of best-in-class telecom services, including fibre, cable, WiFi, and now wireless.”
Shaw is acquiring a 100% interest in Mid-Bowline Group Corp., of which Wind is a wholly-owned subsidiary.
Shaw CEO Brad Shaw
Wind, which was established six years ago, is set to generate $485 million in revenue this year, Shaw said. The wireless company has seen a 47% increase in its subscriber base in the past two years. The news of the acquisition comes a day after Wind announced it had acquired new wireless spectrum in Greater Vancouver.
Alek Krstajic, CEO of Wind, will remain with the company along with the rest of the current management team.
The announcement comes on the same day Shaw announced it was partnering with TransLink to provide WiFi access to all SeaBus passengers.
As of press time, shares of Shaw Communications were trading at $24.57—down 8.90%. The share price for Canada’s other major telecoms also fell overnight; Telus (TSX:T) shares were down 8.22%, Bell (TSX:BCE) shares had fallen 3.43% and Rogers (TSX:RCI.A) had dipped 4.49%.
