BCE Inc. (Bell) (TSX:BCE) announced May 2 it will acquire Manitoba Telecom Services (MTS) for $3.9 billion, and part of the deal will see Burnaby-based Telus Corp. (TSX:T) acquire one-third of all MTS’ wireless subscribers.
The MTS acquisition has yet to receive regulatory approval. The federal government would likely see the deal as a threat to competition in Manitoba, and the divestment of the wireless subscribers to Telus is likely a bid to head off these concerns.
“This transaction with Telus enhances wireless competition to the benefit of Manitobans while recuding the cost of our acquisition of MTS,” George Cope, BCE and Bell Canada president and CEO, said in a news release.
The Telus deal is also subject to regulatory approval.
Bell’s acquisition of MTS includes $3.1 billion to acquire all outstanding shares of the Manitoba company and the assumption of $800 million in outstanding debt. Bell will pay MTS shareholders $40 per share, which represents a 23% premium
Bell said MTS’ Winnipeg office will become Bell’s headquarters in Western Canada. The company also said it plans to invest $1 billion over the next five years to expand wireless and wireline networks across Manitoba.
The MTS acquisition is set to close at the end of 2016 or early 2017.
@EmmaHampelBIV
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