BCE to buy Manitoba Telecom

Deal valued at $3.9B will nearly double Bell’s operation in the West to 6,900 employees

WINNIPEG— BCE Inc. has signed a friendly deal valued at $3.9 billion to buy Manitoba Telecom Services Inc.

The agreement will add Manitoba’s largest phone, Internet and wireless company to a Montreal-based telecommunication business that stretches across Canada.

“Bell and MTS have a shared legacy of service and innovation that spans more than a century,” BCE president and CEO George Cope said in a statement.

“We are honoured to join with the MTS team in this all-Canadian transaction to deliver the benefits of new infrastructure investment, technology development and the best of broadband communications to Manitobans.”

The acquisition will add 2,700 employees from Manitoba Telecom to BCE’s Bell phone business. Bell’s western operation will nearly double to 6,900 people and operate as Bell MTS, headquartered in Winnipeg.

In a side deal, BCE has agreed in principle to sell about one-third of Manitoba Telecom’s postpaid wireless customers as well as one-third of the MTS stores in Manitoba to Vancouver-based Telus Corp.

While often allies, BCE and Manitoba Telecom have occasionally had a combative and competitive relationship.

At one time, BCE was a large shareholder of Manitoba Telecom and there was widespread speculation that the Montreal-based company would buy full ownership.

However, Manitoba Telecom took a different path to remain an independent company and decided to buy Allstream — a Toronto-based company that competes directly with BCE on a national basis for business customers. MTS announced in November that it would sell Allstream to Zayo Group of Boulder, Colo., in a $465-million cash deal that closed in January.

The agreement will require various approvals, including from the CRTC, but is expected to close late this year or early 2017.