Rogers, Shaw Welcome Tribunal’s Clearing of Merger Path, Extend Closing

A woman holds two cellphones in this photo illustration, March 29, 2021 in Chelsea, Que. (The Canadian Press/Adrian Wyld)

Rogers Communications Inc. and Shaw Communications Inc. said they welcome the Competition Tribunal’s dismissal of an effort by the Competition Bureau to block their $26-billion merger as they extended the closing date by a month, while the Commissioner of Competition said he’s considering next moves.

The Competition Tribunal issued a notice late Thursday that it had determined the merger was not likely to result in higher prices for wireless customers in Western Canada, and that it was satisfied the plan to sell Shaw’s Freedom Mobile to Quebecor Inc.’s Videotron was adequate to ensure competition isn’t substantially reduced.

The decision clears a path for the deal to go ahead, requiring only approval from federal Industry Minster François-Philippe Champagne.

“We are pleased with the favourable decision,” said Rogers and Shawin a joint statement. “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 companies also thanked the Tribunal for its swift decision, as they had set a closing date for the deal of Dec. 31, but they said Friday they had extended the close to Jan. 31, 2023.

The head of the Competition Bureau, which had argued that the merger of the two telecommunications companies would lessen competition in the telecom market, trigger higher prices and lead to a worsening of service, expressed dismay at the Tribunal’s decision.

“I am very disappointed that the Tribunal is dismissing our application to block the merger between Rogers and Shaw. We are carefully considering our next steps,” said Commissioner of Competition Matthew Boswell in a statement.

Next steps could include an appeal of the Tribunal’s decision to the Federal Court of Appeal.

The decision comes after weeks of hearings that wrapped Dec. 15 where the Competition Bureau pushed its case that the deal would significantly increase Rogers‘ national market share and power and that the sale of Freedom to Videotron was not enough to address the anti-competitive effects of the merger.

In a summary of its decision, the Tribunal said Videotron’s entry into Western Canada would be able to offer prices at least as competitive as what was offered before the merger, while overall the deal is also likely to spur increased competition among the three major telecoms companies in the region.

“The merger and divestiture are not likely to result in materially higher prices, relative to those that would likely prevail in the absence of the arrangement,” the Tribunal said.

The decision shows the limits of Canada’s merger laws, said Keldon Bester, co-founder of the Canadian Anti-Monopoly Project, in a statement.

“Though the decision is disappointing, it is ultimately a product of Canada’s permissive and outdated merger laws,” he said.

He said the federal government still has an opportunity to protect the interests of Canadians by clarifying and strengthening the criteria for approval that Minister Champagne set out in Oct., including more aggressive pricing targets, timelines to meet them and consequences for not doing so.