Canada’s Federal Court of Appeal has rejected the Competition Office’s request to block Rogers’ acquisition of Shaw, a decision that removes one of the final hurdles standing in the way of the $20 billion merger for keep going
The merger, first proposed in 2021, would see Toronto-based Rogers Communications Inc. take over its Calgary-based rival Shaw Communications Inc. in a move that would further consolidate Toronto’s telecommunications sector. Canada.
The deal has faced numerous regulatory hurdles since it was proposed, but in a lengthy review process, the companies won most of the approvals needed to consummate the deal. As part of that process, Rogers agreed to sell Shaw’s wireless business, Freedom Mobile, to Quebec-based Vidéotron.
The Competition Office was a major sticking point and tried to block the merger on the grounds that it would be bad for consumers, but a court rejected that argument last month.
The office appealed to a higher court for reconsideration, and Tuesday’s hearing settled that dispute, in favor of the companies.
“According to the court, this was not a particularly close case,” Judge David Stratas said. “He found, I would say, on the evidence quite decisively that there was no substantial lessening of competition.”
Now that the Competition Office has been unsuccessful, the last hurdle standing in the way of consummating the deal is the approval of the federal Innovation Minister, François-Philippe Champagne.
Champagne has previously said it would not allow the deal to go through as originally structured, and even with the Freedom Mobile divestment, it has laid out a checklist of what it would take to get it approved.
The minister has said he would rule on the merger only once there is “clarity about the ongoing legal process.”
in a Post on Twitter on TuesdayChampagne said he would “review” the court ruling “closely” and “make a decision in due course.”
Competition lawyer Michael Osborne of the Cozen O’Connor law firm said there was, in his view, no valid reason for the minister to delay, given how lengthy the original tribunal was, with 17 days of testimony and experts providing loads. of evidence both for and against the proposed settlement.
“I think at this point the industry minister has no excuses,” he told CBC News. “I think he’s going to have to. It’s not for him to challenge the Competition Tribunal’s finding on competition; that’s his job. They made the finding.”
Rogers, Shaw and Vidéotron all have a self-imposed deadline of January 31 to finalize the deal, but many of those deadlines have come and gone in this lengthy process.
Officials from Rogers, Shaw and other interested parties will be in Ottawa on Wednesday to testify before the House of Commons standing committee on industry and technology. While the hearing is likely to result in intense probing and questioning, the committee itself lacks the power to block the deal.
Patrick Horan, an analyst at Agilith Capital who covers the technology sector, also says the government is running out of reasons to block the deal.
“I think the government has lost any other ability to influence this acquisition and it’s probably now a fait accompli and it’s only a matter of time before they’re done with this.”
However, that is far from a universal view. Consumer watchdog group the Public Interest Defense Center says the court made a big mistake in rejecting the Competition Bureau’s arguments.
“The public can only suspect that the powers that be want this deal done, even if it means a decade of high wireless and internet prices for Canadians,” CEO and General Counsel John Lawford said after the verdict.
“The court’s ruling means that Canada’s Competition Act is in complete violation and must be radically rewritten to provide tools to block anti-competitive mergers.”
While the deal appears to be getting closer to completion, another last-minute hurdle arose this month when Ontario-based internet provider TekSavvy asked the Canadian Radio, Television and Telecommunications Commission to investigate the terms of the deal. parallel that Rogers reached with Vidéotron to buy Shaw’s. wireless assets.
TekSavvy says Rogers violated the Telecommunications Act by making that side deal because of a series of concessions it offered to the Quebec-based company, “including one in which Rogers will lease its broadband network to Vidéotron at discounted rates that They are not available to independent ISPs, such as TekSavvy.”
Dwayne Winseck, a professor at Carleton University’s School of Journalism and Communication, said the Rogers deal “could collapse like a house of cards if TekSavvy’s complaint really wins.”
“If that’s the case, then we’ve got a real mess on our hands,” he told CBC News on Tuesday.
Winseck said Rogers and Shaw may have convinced the Competition Court and the Federal Court of Appeals that the deal is not bad for consumers, but he remains unconvinced.
By removing another player from Canada’s already small telecom landscape, it “reduces pressure on all players to improve their offerings, make their services more affordable, offer more generous data allowances on the fixed and wireless side,” said.
“This gives Bell and Telus now more room to basically … take their foot off the pedal. And it allows Rogers to do the same.”
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