Plus Pages

Friday, December 30, 2022

Rogers' $20B Deal For Shaw Wins Court Approval


Canada’s merger court ruled in favour of Rogers Communications Inc. and Shaw Communications Inc. in an antitrust case, clearing one of the final hurdles to the union of two of the country’s largest telecommunications firms.

The nation’s antitrust czar failed to prove that the deal would result in substantial harm to competition in the sector, the Competition Tribunal’s three-person panel said in a ruling released late Thursday. The transaction is not likely to lead to “materially higher” prices or a decline in service or innovation, the panel said.

 
Bloomberg reports the court’s decision ends a crucial stage in a seven-month legal process that has delayed the closing of a $20 billion transaction that has been two years in the making. But it doesn’t mean the saga is over yet. Competition Commissioner Matthew Boswell could try to appeal the ruling, and even if he doesn’t, the transaction still requires the approval of the federal government.

Rogers, Canada’s largest wireless company with more than 10 million phone customers, agreed to buy Shaw in March 2021 in an effort to bulk up its home internet and cable television businesses and add key network infrastructure in Western Canada. The Toronto-based company had also been hoping to extend its lead in wireless services by adding Shaw’s Freedom Mobile division.

However, the government made it clear earlier this year that it wouldn’t allow Rogers to take control of Shaw’s wireless licenses, and then Boswell’s agency sued the companies in May to block the deal on the grounds that it would hurt consumers by driving up wireless costs or reducing service.

That forced Rogers and Shaw and cut a conditional deal to sell Freedom Mobile to Montreal-based cable and wireless firm Quebecor Inc. That transaction, worth $2.85 billion, will only happen if the larger Rogers-Shaw transaction is allowed to close. But it was key to the Rogers court victory.

“It bears underscoring that there will continue to be four strong competitors in the wireless markets in Alberta and British Columbia,” the tribunal said, naming the two Canadian provinces where Shaw does most of its business. In addition to Rogers and Quebecor, the other major wireless companies in that region would be national players Telus Corp. and BCE Inc.

Industry Minister Francois-Philippe Champagne, who’s responsible for telecommunications policy, appeared to signal the government’s support for the deals last month by publicly setting out the conditions under which he’d sign off on Quebecor’s purchase of Freedom.

No comments:

Post a Comment