Competition Tribunal refuses to block Rogers’ purchase of Shaw

The Competition Tribunal has dismissed a request from Canada’s Competition Bureau to block Rogers Communications’ $26 billion bid to acquire competitor Shaw Communications.

The Tribunal’s decision thus paves the way for the merger of the two companies, but this must still be approved by Innovation, Science and Economic Development Canada.

In a summary of its decision released Thursday, the court says the purchase will not result in a significant price increase.

The deal, which includes the sale of Shaw-owned Freedom Mobile to Quebecor-owned Videotron, is unlikely to prevent or lessen competition substantially, according to the decision.

Quebecor agreed to buy Freedom in a $2.85 billion deal earlier this year.

Fears dismissed

Fears from Rogers’ main rivals in Canada, Bell and Telus, have also been dismissed. They said they would be unable to compete with the two merged companies.

« The Tribunal also concluded that the strengthening of Rogers’ position in Alberta and British Columbia, together with very significant competitive initiatives that Telus and Bell have deployed since the merger announcement, will likely contribute to an increase in the intensity of competition in those markets,” reads the summary.

The Tribunal indicates that a more detailed decision will be rendered within the next two days.

The Competition Bureau reacted late Thursday evening to the findings of four weeks of hearings.

“I am very disappointed that the Court rejects our request to block the merger between Rogers and Shaw. We are carefully assessing the next steps,” competition commissioner Matthew Boswell said briefly in a written statement.

Throughout the hearing, the Competition Bureau argued that the proposed acquisition would reduce competition in the telecommunications market, lead to higher prices, and poor service.

Rogers and Shaw argued that the agreement would enhance competition and benefit consumers.

Earlier this year, Industry Minister Francois-Philippe Champagne argued he would not allow Rogers to acquire all of Shaw’s wireless licenses, suggesting final merger approval required concessions , including the sale of Freedom.

Scheduled for December 31, the deadline for concluding a merger agreement is fast approaching, although the parties have the option of pushing the deadline until the end of January if necessary.

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