Shaw to Acquire Wind Mobile for $1.6 Billion

by Istvan Fekete on December 17, 2015

shaw commAlthough it acquired wireless spectrum licences in a 2008 public auction, in 2011 Shaw ultimately made a strategic move and dropped its initial plans to enter the wireless market. Today, however, it is back in force: It has surprised Canadian wireless players by announcing on Wednesday evening that it will acquire Wind Mobile in a $1.6 billion deal.

That’s a major jump in valuation for Wind, which was acquired by a consortium of financial investors in September 2014 for roughly $300 million. Since then, the wireless startup has taken major steps to keep up with the competition: It has appointed former Public Mobile CEO Alek Krstajic as its CEO and, more recently, announced plans to build its LTE network with the help of $425 million in financing from Canada’s leading banks.

Also, it is worth noting that, according to the latest numbers, Wind Mobile is just one step from its goal set for 2015: to reach 1 million wireless subscribers. The press release announcing the acquisition states that Wind now has more than 940,000 subscribers, which is only 60,000 short of the proposed goal.

For Shaw, the acquisition of Wind means that it can finally offer bundled services – television, Internet and wireless – and compete with the Big 3 in urban areas in Ontario, British Columbia, and Alberta.

“Wireless was a missing piece,” Shaw CEO Brad Shaw said in an interview, adding that now the company will be able to match its main rival, Telus Corp., which already has one of the largest cellular businesses in Canada and competes with Shaw for television and Internet customers. “Now we’re on the same page, we’re at the same level … and we’ve improved our competitive position in Western Canada just by doing this deal, let alone the opportunity in the East.”

Wind’s current CEO will continue to run the wireless business, which will remain based in Toronto. While Wind’s shareholders were satisfied with the deal and approved the sale, it still requires approval from the federal government and the Competition Bureau. Shaw expects the deal to close during the first quarter of fiscal 2016.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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