MONTREAL: Canadian telecoms giant Rogers said Monday it had reached an amicable agreement to buy rival Shaw in a deal valued at Can$26 billion (Usd$21 billion), creating a new heavyweight rival for Bell and Telus.

The announcement of the merger raised concerns about the future of competition in the Canadian telecoms sector, where a very small number of players share a very lucrative market.

Internet and mobile telephone services in Canada are among the most expensive in the industrialized world, according to the OECD, in part because of the size of the country, the largest in the world after Russia.

Toronto-based Rogers, the third largest player in the sector in Canada by turnover, is number one for the number of mobile telephone subscribers, leading its main competitors, the Bell and Telus groups.

Minister of Innovation Francois-Philippe Champagne responded by noting that "greater affordability, competition and innovation in the Canadian telecommunications sector are as important to us as a government as they are to Canadians concerned about their cell phone bills."

"These goals will be front and centre in analyzing the implications of today's news," he added. "We won't presuppose the outcome of these processes."

In addition to his ministry, the regulator of the sector in Canada, the CRTC, as well as the Competition Bureau, will scrutinize the proposed merger.

"Should the Bureau determine that the proposed transaction is likely to substantially lessen or prevent competition, we will not hesitate to take appropriate action," the Competition Bureau said in a statement.

Rogers Communications will pay Can$40.50 in cash per share to its competitor, for a total of Can$20 billion.

That is 70 percent higher than the recent share price, Rogers said in a joint statement with its rival.

Rogers said it will also take on its rival's debt of Can$6 billion, bringing the total deal to around Can$26 billion.