“There will continue to be four strong competitors in the Alberta and British Columbia wireless markets,” the court says.
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Canada’s merger tribunal ruled in favor of Rogers Communications Inc. and Shaw Communications Inc. in an antitrust case, removing one of the final obstacles to the merger of two of the country’s largest telecommunications companies and the expansion of Videotron from Quebecor into a national wireless provider. .
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The Competition Bureau, which had opposed the transaction, was unable to show the court that the deal would result in substantial harm to competition in the sector, the court’s three-person panel said in a ruling published Thursday night. The transaction is not likely to lead to “materially higher” prices or a decrease in service or innovation, the panel said.
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The court’s decision ends a crucial stage in a seven-month legal process that has delayed the closing of a $20 billion transaction that has taken two years to complete. But that doesn’t mean the saga is over yet. Competition Commissioner Matthew Boswell could try to appeal the ruling, and even if he doesn’t, the transaction still requires federal government approval.
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In your own statementBoswell said he was “very disappointed that the Court dismissed our motion to block the merger between Rogers and Shaw. We are carefully considering our next steps.”
Rogers, Canada’s largest wireless company with more than 10 million phone customers, has agreed to buy Shaw in March 2021 in an effort to grow its home internet and cable TV businesses and add key network infrastructure in the west. from Canada. The Toronto-based company also hoped to expand its leadership in wireless services by adding Shaw’s Freedom Mobile division.
However, the government made it clear earlier this year that it would not allow Rogers to take control of Shaw’s wireless licenses, and then Boswell’s agency sued the companies in May to block the deal on the grounds that it would harm to consumers by increasing wireless technology. costs or reduction of service.
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That forced Rogers and Shaw to make a conditional deal to sell Freedom Mobile to Quebecor. That transaction, worth $2.85 billion, will only happen if the larger Rogers-Shaw transaction is allowed to close. But it was key to Rogers’ court victory.
“It is worth noting that there will continue to be four strong competitors in the Alberta and British Columbia wireless markets,” the court said, naming the two provinces where Shaw does most of its business. In addition to Rogers and Quebecor, Telus and Bell operate nationwide.
Industry Minister Francois-Philippe Champagne, who is responsible for telecoms policy, appeared to signal the government’s support for the deals last month by publicly setting out the conditions under which he would approve Quebecor’s purchase of Freedom.
Rogers is offering $40.50 in cash for each share of Shaw, which closed at $35.77 a share Thursday in Toronto.