By Divya Rajagopal and Akriti Sharma
(Reuters) -Canada’s competition tribunal approved on Thursday Rogers Communications Inc’s C$20 billion ($14.77 billion) bid for Shaw Communications Inc, ending the companies’ 20-month-old dispute with the antitrust authority.
The decision by the tribunal paves the way for closing the merger that would create the second largest telecom company in Canada after Bell. Canada’s competition bureau had blocked the merger – one of the country’s biggest – on grounds that it would reduce competition.
The two telecoms companies took their battle to Canada’s competition tribunal, arguing that Shaw faced bleak prospects in the absence of a Rogers takeover.
The companies had also proposed selling Shaw’s Freedom Mobile Inc to Quebecor Inc to facilitate the merger but the bureau rejected that, saying Quebecor was not a viable competitor with the merged entity.
In a ruling late on Thursday, the Competition Tribunal dismissed the Commissioner of Competition’s request to oppose the deal, saying that the deal is “not likely to prevent or lessen competition substantially.”
The panel also ruled that the proposed deal is not likely to lead to “materially higher” prices or a decline in service, quality or innovation.
“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,” Matthew Boswell, Commissioner of Competition, said in a statement.
The deal has been seen as a test case for the Canadian antitrust bureau’s ability to foster competition in a country where customers and advocates have complained about market concentration from industries ranging from telecoms to banks.
Rogers-Shaw and Quebecor now await approval from Canada’s Industry Minister François-Philippe Champagne to transfer Freedom Mobile’s spectrum license to Quebecor. In October, he hinted his intention to approve the sale as long as the telecom operator holds Freedom Mobile assets for at least 10 years and keeps prices comparable to its current levels in Quebec, which are 20% lower than in Ontario and Western Canada.
In a joint statement on Friday, Rogers and Shaw welcomed the competition tribunal’s decision and expressed hope that they can “clear the final regulatory hurdle”.
The Rogers-Shaw proposed deal was announced in March 2021, when the Alberta-based Shaw family decided to sell the company to Rogers for C$40.5 per share.
($1 = 1.3544 Canadian dollars)
(Reporting by Divya Rajagopal and Akriti Sharma; Editing by Christian Schmollinger and Muralikumar Anantharaman)
