In a landmark deal, Canadian broadband giant Bell Canada Enterprises (BCE) announced its acquisition of Ziply Fiber, a leading fiber internet provider in the Pacific Northwest, for a staggering $3.6 billion. This acquisition, expected to close in the latter half of 2025, marks a significant milestone for both companies.

Company Sizes:

• Ziply Fiber: Since its formation in 2020, Ziply Fiber has rapidly expanded its fiber footprint across Idaho, Montana, Oregon, and Washington, covering over 1.3 million homes. The company plans to more than double its coverage to 3 million homes within the next four years.
• BCE: As Canada’s largest communications company, BCE boasts a vast network and a strong presence in the Canadian market. With this acquisition, BCE aims to expand its fiber footprint to over 12 million locations across North America by the end of 2028, solidifying its position as the third-largest fiber internet provider in the region.

In a significant move that has impacted the stock market, BCE Inc. experienced a notable decline in share value following the announcement of its acquisition of Ziply Fiber and the subsequent pause on dividend growth. The shares of BCE plummeted by 9.7%, closing at C$40.47, which marked the lowest closing price since May 2012. This sharp drop reflects investors’ reactions to the company’s strategic decision to halt dividend growth for the entirety of 2025, breaking a 16-year streak of annual dividend increases.

The acquisition deal, valued at approximately C$5 billion ($3.6 billion), is part of BCE’s ambitious expansion into the U.S. market, specifically targeting the Pacific Northwest region. This move is expected to significantly enhance BCE’s fiber footprint, adding around 1.3 million locations with plans to expand further in the coming years. The decision to acquire Ziply Fiber, which is currently owned by Searchlight Capital in partnership with three Canadian pension funds, aligns with BCE’s long-term growth strategy and its focus on fiber network expansion.

However, the announcement has not been without its controversies. The pause on dividend growth, coupled with the introduction of a discount on its dividend reinvestment plan (DRIP), has raised concerns among shareholders who have long valued the consistent dividend increases as a core aspect of their investment in BCE. The company’s management has defended the strategy, emphasizing the long-term benefits and the alignment with BCE’s core competencies in fiber operations.

The market’s reaction to BCE’s strategic moves underscores the delicate balance companies must maintain between pursuing growth opportunities and meeting shareholder expectations. As BCE navigates this new chapter, the telecommunications giant will be closely watched by investors and industry analysts alike, who will be keen to assess the long-term impact of these decisions on the company’s financial health and market position.