Plans by MTS to sell off its Allstream division have gone sour after the federal government denied the sale.
MTS had announced earlier this year to sell Allstream to Accelero Capital Holdings for $520 million, but apparent national security concerns have scrapped the business deal.
“We pursued this transaction, with Accelero as our partner, in direct response to the federal government’s stated policy objectives of increasing foreign investment and driving greater competition in Canada’s telecommunications sector, so this result is very difficult to understand or accept,” said MTS Allstream CEO Pierre Blouin.
The specific national security concerns surrounding the deal weren’t outlined by Ottawa in their decision to block the sale to the Cairo-based investment company.
“We are fortunate that our two businesses, MTS and Allstream, have strong market positions and outstanding employees who are committed to meeting the needs of our customers throughout Manitoba and at small, medium and enterprise-scale organizations across Canada.”
Both companies say they are reviewing their options.