April 18 (Bloomberg) -- Mobilicity, the struggling Canadian wireless company, agreed to be acquired by Telus Corp. in a deal it said won’t reduce competition for subscribers.
The acquisition price is $350 million, Mobilicity said in a statement, without specifying if the amount was in U.S. dollars or Canadian dollars. The deal is subject to approval by Ontario courts and regulators and will include the transfer of the company’s wireless spectrum licenses to Telus.
Canadian Industry Minister Christian Paradis in June blocked Telus, Canada’s second-largest wireless carrier, from acquiring Mobilicity’s airwave licenses as part of efforts to safeguard consumer choice. The announcement comes after a five-year moratorium on the transfer of Mobilicity’s spectrum, the completion of Industry Canada’s 700-megahertz spectrum auction and the announcement of an auction of airwaves in the 2500-megahertz band, according to the statement.
“The Transaction will not affect competition in the Canadian wireless sector,” according to the statement. The deal “satisfies the criteria considered by Industry Canada in determining whether to approve a transfer of spectrum licenses.”
Canada auctioned spectrum in 2008, setting aside for five years some licenses for smaller players to boost competition in a wireless industry dominated by BCE Inc., Rogers Communications Inc. and Telus.
The government previously said that after the moratorium ends, it will block spectrum sales deals “case-by-case” where it deems the deal would undermine competition.
Vancouver-based Telus overtook BCE to become Canada’s second-largest carrier in the past year.
Telus was the only one of five bidders for Mobilicity to propose an “acceptable transaction,” the company said.
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