BCE's $5 Billion Ziply Acquisition Sparks Investor Concerns

BCE Inc.'s strategic move into the U.S. fiber market leads to a pause in dividend growth, causing a significant drop in share price.

BCE Inc. has acquired U.S. fiber internet provider Ziply Fiber for $5 billion, expanding its operations into Washington, Oregon, Montana, and Idaho.
The acquisition will be funded by proceeds from the sale of BCE's stake in Maple Leaf Sports & Entertainment, rather than reducing debt as some investors anticipated.
BCE plans to pause dividend growth for 2025, a decision that has led to a 9.7% drop in its stock price, reaching a 12-year low.
The company aims to double Ziply's fiber reach to 3 million locations by 2028, positioning BCE as the third-largest fiber provider in North America.
Analysts are concerned about the acquisition's impact on BCE's free cash flow and the sustainability of its dividend in the near term.