Business

Selling Freedom Mobile not enough to OK Rogers Shaw merger, Competition Bureau tells Tribunal

The Competition Tribunal's public hearing on Rogers Communications Inc.'s $26 billion proposed takeover of Shaw Communications Inc. begins Monday as the telecom companies look to take the deal across the finish line.

Hearings expected to last weeks while merger, if approved, might happen in January

Rogers proposed buying its rival Shaw in 2021, but the deal has faced multiple delays and so far has yet to happen. (Adrian Wyld/The Canadian Press)

Canada's competition watchdog says it still intends to block Rogers Communications Inc.'s $26-billion proposed takeover of Shaw Communications Inc. in the first day of a weeks-long hearing before the Competition Tribunal.

In its opening argument Monday, the Competition Bureau reiterated its position that the planned sale of Shaw-owned wireless carrier Freedom Mobile to Quebecor Inc.'s Videotron Ltd. is not enough to eliminate its concerns that the broader merger would lead to worse services and higher prices for consumers.

The regulator says separating Freedom from Shaw would make it a diminished competitor because it would remove Freedom's access to certain shared human resources and synergies the company "has enjoyed" as part of Shaw.

It says the divestiture would not replace the "vigorous" competitive presence offered by Shaw.

WATCH | Ottawa forbids Rogers from buying Shaw's wireless business: 

Ottawa rejects part of proposed Rogers-Shaw merger deal

3 months ago
Duration 1:53
The federal government says it’s denying part of Rogers’s bid to merge with Shaw, specifically pertaining to cell phone service. However, that doesn’t mean the deal is dead.

The Competition Bureau says the sale would create a situation where Videotron is likely to be more "aligned" with Rogers and more vulnerable to anti-competitive actions by Rogers.

It also notes that even with the sale of Freedom, Rogers will still be acquiring customers from Shaw Mobile.

The Competition Bureau is one of three regulatory agencies that must approve the deal before it can close, in addition to the CRTC and Innovation, Science and Economic Development Canada.

Last week, the competition watchdog doubled down on its intention to fully block the deal.

The hearing is expected to last four weeks with oral arguments scheduled for mid-December.

Chief Justice Paul Crampton will be heading the Competition Tribunal panel during the hearing.

Rogers is hoping to close the Shaw deal by the end of the year, with a possible further extension to Jan. 31, 2023.

 

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