Canadian competition authority maintains opposition to Rogers-Shaw deal By Reuters


© Reuters. The Rogers Building, home of Rogers Communications in Toronto, Ontario, Canada October 22, 2021. REUTERS/Carlos Osorio

By Divya Rajagopal and Ismail Shakil

TORONTO (Reuters) – Canada’s antitrust regulator said on Friday it remained opposed to Rogers (NYSE:) Communications’ plan to buy Shaw Communications (NYSE:), rejecting the companies’ argument that the benefits to the economy would compensate for the damage to competition.

The legal proceedings are due to begin on June 23 and could continue until the end of the year.

The Competition Bureau, however, has not won a merger challenge before. Of eight that have gone to competition court, it has lost or settled six, and two are pending, according to official data.

Canadian law allows mergers that harm competition to be approved if companies can demonstrate that the merger brings efficiency to the economy.

As part of the proposed C$20 billion ($15.4 billion) deal, Rogers offered to sell Shaw’s Freedom mobile unit to assuage competition concerns.

The office said the sale would weaken Freedom’s operations, removing “competitive discipline” for national carriers. The merger would also result in a transfer of wealth from low- and middle-income groups to wealthy Rogers-Shaw families, he said.

Rogers declined to comment.

The companies had planned to complete the transaction by July 31.

Shares of Shaw ended 1.5% higher at C$34.64, a 14.7% discount to Rogers’ offer price, reflecting uncertainty surrounding the deal. Shares of Rogers rose 1.9% to C$59.01, while the benchmark Canadian stock index fell 0.4%.

($1 = 1.3026 Canadian dollars)


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