The ruling dismissed the Commissioner of Competition’s petition to oppose the proposed Rogers-Shaw merger
Canada’s competition tribunal approved Rogers Communications’ CAD 20 billion ($14.77 billion) bid for rival operator Shaw Communications.
The ruling, which dismissed the Commissioner of Competition’s petition to oppose the proposed merger, also stated the Rogers-Shaw merger after the sale of Freedom Mobile may not prevent or lessen competition or lead to higher prices or a decline in quality of service.
In a joint statement, Rogers Communications and Shaw Communications welcomed the decision by the competition tribunal allowing the proposed acquisition of Freedom Mobile by Videotron a wholly-owned subsidiary of Quebecor, and the subsequent combination of Rogers and Shaw.
“This is an important milestone in the regulatory process and moves us one step closer to closing a series of transformative transactions proposed by Rogers, Shaw, and Quebecor. We look forward to reviewing the details of the decision and working with the Minister of Innovation, Science and Industry so we can clear the final regulatory hurdle to close these transactions,” the joint statement reads.
“I am very disappointed that the tribunal is dismissing our application to block the merger between Rogers and Shaw,” said Matthew Boswell, Commissioner of Competition. “We are carefully considering our next steps,” he said. The Competition Bureau later confirmed that it was appealing the tribunal’s ruling.
In July 2022, Rogers Communications said it had delayed the deadline for its proposed acquisition of Shaw Communications to December 31, 2022, with the potential to extend it this deadline. Now the two companies said they have agreed to extend the outside date of the proposed merger to January 31, 2023. The proposed merger had been initially announced on March 15, 2021.
Canada’s competition bureau had 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 August 2022, Rogers Communications, Shaw Communications and Quebecor had entered into a definitive agreement for the sale of Freedom Mobile to Videotron, a subsidiary of Quebecor. The involved parties also said that the sale of Freedom Mobile would pave the way for the establishment of a “strong fourth national wireless services provider”, something that would address the concerns raised by the Commissioner of Competition and the Minister of Innovation, Science and Industry regarding the Rogers-Shaw merger.
The new combined business of Videotron and Freedom Mobile will be in a position to launch a national 5G offering, using Videotron’s 3.5 GHz frequencies.
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, but remained subject to review by the Competition Tribunal and Competition Bureau and approval by the Minister of Innovation, Science and Industry.
Rogers and Shaw still need the approval from Industry Minister François-Philippe Champagne to transfer Freedom Mobile’s spectrum license to Quebecor’s Videotron unit.
Currently, Canadian residents have four options for mobile operators — Rogers, Shaw, Telus Corp. and BCE Inc.
