Rogers Communications' $26 billion takeover of Shaw Communications hit another snag. The two firms and Quebecor (which plans to purchase Shaw-owned Freedom Mobile) haven’t been able to negotiate a solution to antitrust concerns raised by the country’s Competition Bureau and now will likely be heading to hearing with the country’s Competition Tribunal as soon as next week, according to a Bloomberg report.
“The mediation did not yield a negotiated settlement. We are disappointed with this outcome and believe that litigation is both unnecessary and harmful to competition. The Bureau's unwillingness to meaningfully engage unduly delays lower wireless prices for Canadian consumers,” the companies said in a joint statement.
Rogers first announced its intention to buy Shaw in March 2021, a move that would reduce the number of Canadian wireless operators from four to three. But Canada’s Competition Bureau opposed the acquisition because it said it would hurt competition.
In June, Shaw agreed to sell its Freedom Mobile division to Montreal-based Quebecor through its subsidiary Videotron for $2.3 billion. Rogers and Shaw said at the time that they believed the sale of Freedom Mobile to Quebecor would ensure the presence of a strong fourth wireless carrier.
But apparently that solution wasn’t enough to convince the Competition Bureau. The agency has argued in court documents that Freedom will still be a weaker competitor even under new ownership and consumers will still pay higher prices.
Rogers and Shaw tried to mediate with the Competition Bureau but now must face a Competition Tribunal, which is a specialized tribunal that operates independent of any government agency.
The tribunal may side with the Competition Bureau and block the transaction or it might suggest a compromise. In the meantime, Rogers and Show could still negotiate a settlement out of court with the Competition Bureau so it can move forward with its acquisition.