Lexpert Magazine

12 LEXPERT MAGAZINE | SEPTEMBER 2017 | RECENT DEVELOPMENTS IN BUSINESS LAW | timeframe for negotiating and signing of the deal wasn't easy on the lawyers, but we managed to hold the line. LEXPERT: What was the dynamic of the negotiations? Hansen: e fact that this transaction involved negotiations and various deals amongst very sophisticated parties who are fierce competitors brought an interesting dynamic. In the end, each of the parties was able to find a deal that worked for each of them. Negotiations were challenging yet productive; they were tense at times but both sides were reasonable. Facey: I have to say, because of the sophistication of the parties, things never got out of hand or disrespectful. LEXPERT: Was it difficult to combine the companies' operations and infrastructure? Norman Snyder (Taylor McCaffrey LLP, for Bell): We found that it was oen quite challenging to find a way to meet the commercial and tax objectives in the face of specific corporate restrictions which arose as a consequence of applicable legislation. For instance, as local counsel in Manitoba we had to consider the structure and how it was to be implemented in the context of specific Manitoba corporate and consumer protection legislation. LEXPERT: Some commentators have called the deal a strike against consumers that could increase wireless pricing and consolidation in the industry. How would you respond to this? Facey: e transaction was never about anything other than improving networks and customer service in Manitoba. To bring down market share Bell agreed to divest some subscribers to Telus. Remember Bell and Telus were very small in Manitoba. e deal actually de-concentrated the marketplace. I think the benefits will be born out over time. People are naturally sensitive about consumer products like telecom because it's so central to our lives these days, so it attracts a lot of informed and not-so-informed commentary. At the end Xplornet agreed to enter the market as well, so it's clear the Bureau did its job. Bibic: Manitoba customers will benefit from the scale, reach and financial strength that Bell MTS brings to the table. e wireless industry is not more consolidated as a result of this transaction. It's actually the opposite I'd say. Among other things, Telus and Bell will now be able to compete in rural Manitoba where people's choices were formerly limited to Rogers and MTS, and Xplornet will build a third wireless network in the province hence increasing network-based competition in wireless. LEXPERT: What was the biggest challenge in executing? e most memorable aspect? Sean Vanderpol (Stikeman Elliott LLP, for MTS): e deal was complex from a regulatory perspective, with a lengthy period of time between final shareholder/ court approval and the final regulatory approvals. Executing a public transaction over such a lengthy period of time posed a substantial challenge, as all the pieces needed to come together within the overall deal framework that shareholders had approved. It was a testament to the clients that they were able to persist and achieve the result that they did; for counsel it was very rewarding. Hansen: A big challenge in this deal for BCE was juggling separate negotiations with the regulators, Telus, Rogers, Xplornet and MTS. With Telus, BCE was in the odd position of negotiating a divestiture of MTS assets that it didn't own yet. It took around-the-clock negotiations in the weeks leading to closing for BCE to find common ground with each party. Facey: As lawyers, it was extraordinary to get a deep understanding of how important sophisticated communication networks are to innovation and the broader economy. Understanding how communications are one of the backbones of our economy is something I will never forget. ON THE TREND Telecom Deal Surge As the graphic below demonstrates, the past couple of years have seen a surge in M&A transactions (over US$50 million) in the telecommunications sector. BCE's US$3.7-billion acquisition of Bell Aliant started it all off in 2014, but since then we've also seen big deals in the telecom hardware sector from the likes of Brookfield Infrastructure and satellite developer MDA. GRAPHIC BY DAVID DIAS; SOURCE: THOMSON REUTERS

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