Videotron sued Rogers for $91 million, alleging a breach of contract in the sale of Freedom Mobile.
Spotted by Cartt, Videotron filed a six-page notice of action in the Ontario Superior Court on the two-year anniversary of Rogers’ closing the Shaw deal. Videotron’s purchase of Freedom Mobile was a part of that deal.
The notice of action reportedly only claimed breach of contract without details and asked the court to order Rogers to perform its obligations outlined in the August 2022 share purchase agreement. That agreement includes terms for Videotron purchasing the outstanding shares of Freedom Mobile. Additional details should arrive when Videotron files a statement of claim.
Videotron accused Rogers of unjustly enriching itself and said the company owes $91 million in damages for breach of contract, breach of duty, and negligent misrepresentation.
Videotron acquired Freedom Mobile for $2.85 billion as part of Rogers’ $26 billion takeover of Shaw in 2023. The move also solidified a settlement between Videotron and Rogers related to a 2021 lawsuit for $850 million related to Rogers’ alleged breach of contract in a network-sharing agreement.
Videotron did not respond to MobileSyrup’s request for comment in time for publication. Rogers declined to comment.
None of the allegations have been proven in court.
On top of getting Freedom out of the deal, Videotron agreed to several conditions to secure the sale, such as promising to offer plan options that are at least 20 per cent cheaper than what’s offered by Rogers, Bell, and Telus. Videotron also agreed to expand its 5G network in the area where Freedom operates within a two-year period.
Videotron, Rogers made commitments to secure deal
Rogers also made several commitments to secure the Shaw merger, including creating 3,000 new jobs in Western Canada and establishing a headquarters in Calgary. Further, Rogers agreed to invest $1 billion in broadband internet access and 5G services where they currently aren’t available, along with investing $2.5 billion in its 5G network in Western Canada and $3 billion in other network expansion projects.
Videotron was set to face fines of up to $200 million for failure to comply, while Rogers faces fines of up to $1 billion.
On the first anniversary of the Shaw merger, Rogers took a victory lap, declaring it “increased competition and choice” and said wireless prices have come down. However, in that first year, Rogers also hiked prices on former Shaw customers and laid off employees through post-acquisition restructuring.
This year alone, Rogers laid off nearly 400 customer support workers and is embattled with former Shaw employees following a unionization effort. The company also slammed customers with various rate increases and fees, including upping the connection fee to $75, increasing roaming rates ahead of March Break, raising mobile prices by $3, and charging customers who use its 3G network a new fee.
Meanwhile, Rogers is set to spend $11 billion on 12 years of NHL broadcasting rights and recently closed a deal to sell a stake in its network to Blackstone for $7 billion.
Source: Cartt
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