Canada’s competition bureau has put on hold Rogers’ proposed purchase of Shaw, as it believes the deal will negatively impact competition in the domestic telecom sector
Rogers Communications has delayed the deadline for its CAD20 billion ($15.56 billion) acquisition of rival Shaw Communications to December 31, 2022.
The Canadian telco said that this new deadline may be further extended to January 31, 2023.
“Rogers and Shaw continue to pursue the divestiture of Freedom Mobile to Quebecor on the terms set out in the previously disclosed agreement. Negotiation of the definitive transaction documents are progressing, and the parties will provide an update in due course,” Rogers said.
Canada’s competition bureau has put on hold Rogers’ proposed purchase of Shaw, as it believes the deal will negatively impact competition in the domestic telecom sector, leading to increased mobile bills for consumers.
In a move to overcome these concerns, Rogers and Shaw had previously agreed to sell Freedom Mobile, the cellular business owned by Shaw, to Montreal-based Quebecor for CAD2.85 billion. But the country’s competition bureau has previously said that the sale of Freedom Mobile would be insufficient to bolster competition in the Canadian mobile telephony market. Under the terms of the deal, Quebecor gets all of Freedom Mobile’s infrastructure, spectrum, and retail locations. The agreement also includes long-term roaming and backhaul and backbone service agreements between the operators.
Last week, Canada’s antitrust agency said it would need more time to examine the concession offered to allay competition concerns over the proposed transaction.
On a conference call to discuss Rogers’ Q2 financial results, the company’s CEO Tony Staffieri said he was confident the Freedom sale will address the concerns raised by both the Commissioner of Competition and Industry Minister François-Philippe Champagne.
“Rogers, Shaw and Quebecor are committed to seeing this transaction through to completion. The three companies have put together a competitive and commercially sustainable remedy that will create a strong Canadian fourth carrier, with proven operations in multiple provinces, that will reach over 80% of the Canadian population,” Staffieri said.
The Rogers-Shaw transaction has already been approved by the shareholders of Shaw and the Court of Queen’s Bench of Alberta, and the Canadian Radio-television and Telecommunications Commission, and remains subject to review by the Competition Tribunal and Competition Bureau and approval by the Minister of Innovation, Science and Industry.
In March last year, Rogers Communications had announced that it will purchase Shaw Communications.
Rogers and Shaw promised more than $2 billion in 5G network expansions, a new public fund to help connect rural and indigenous communities, promises of new jobs and infrastructure money for government projects and more.
Currently, Canadian residents have four options for mobile operators — Rogers, Shaw, Telus Corp. and BCE Inc. — but if the deal is approved, Canadians will have one fewer provider to choose from.
