The opposition council announced on Friday that Rogers Communications Inc., Shaw Communications Inc., and Canada’s opposition department have agreed to initiate an intervention cycle to address the antitrust concerns raised by Rogers’ C$20 billion ($15.5 billion) acquisition of Shaw.
The action comes after a protracted period of back-and-forth between the parties after the antitrust group blocked Rogers’ bid, stating that the deal will reduce competition in Canada’s concentrated telecoms business and increase long-distance prices.
While Rogers gave a concession last week by agreeing to sell Shaw’s Freedom Mobile to Quebecor Inc for C$2.85 billion, the opposition department stated that the remedy measures should protect competition following the merger.
The intervention could make it easier to reach a deal and stop a long court battle before the Competition Tribunal, which decides the fate of deals that are being fought over.
“It is a sign that the opposition leader is not philosophically opposed to the exchange, so there is a path to restricted backing,” said Aaron Glick, a New York-based executive with Cowen & Co.
In an announcement, the Competition Tribunal said, “The groups have told the council that they want to take part in the arbitration scheduled for July 4th and 5th.” The announcement also said that all information about any arbitration would be kept secret.
Rogers’ proposed acquisition of Shaw comes as high portable charges continue to be a contentious issue in Canada, where subscribers pay the highest remote bills in the world. Rogers, BCE Inc (BCE.TO), and Telus Corp (T.TO) are the business’s top three revenue generators, accounting for about 90 percent of the total.
Now that both sides have agreed to the intercession cycle, the fate of the agreement that will be delivered in March 2021 could be getting closer.
The agency was expected to try to sell Shaw’s cell phone company, Shaw Mobile, on Thursday so that antitrust concerns would go away.
In a recording made last week, the department said, among other things, that Shaw Mobile was the main reason for Shaw’s growth and that this would have kept happening even if Rogers hadn’t bought Shaw.
The intervention could make it easier to reach a deal and stop a long court battle before the Competition Tribunal, which decides the fate of deals that are being fought over.
“It is a sign that the opposition leader is not philosophically opposed to the exchange, so there is a path to restricted backing,” said Aaron Glick, a New York-based executive with Cowen & Co.
In an announcement, the Competition Tribunal said, “The groups have told the council that they want to take part in the arbitration scheduled for July 4th and 5th.” The announcement also said that all information about any arbitration would be kept secret.
Rogers’ proposed acquisition of Shaw comes as high portable charges continue to be a contentious issue in Canada, where subscribers pay the highest remote bills in the world. Rogers, BCE Inc (BCE.TO), and Telus Corp (T.TO) are the business’s top three revenue generators, accounting for about 90 percent of the total.
Now that both sides have agreed to the intercession cycle, the fate of the agreement that will be delivered in March 2021 could be getting closer.
The agency was expected to try to sell Shaw’s cell phone company, Shaw Mobile, on Thursday so that antitrust concerns would go away.
In a recording made last week, the department said, among other things, that Shaw Mobile was the main reason for Shaw’s growth and that this would have kept happening even if Rogers hadn’t bought Shaw.
During the intervention interaction, the groups will argue for their situation in front of a council judge, who may offer good ways to solve the problem.
If the parties agree to the arbitrator’s recommended arrangements, they could sign an assent agreement that would pave the way for approving the agreement, according to a legal advisor familiar with the process who spoke to Reuters.
In the event that they are unable to reach an agreement, the matter will be scheduled for a court hearing beginning in November. A result would be typical by the end of the year.
Friday’s Toronto closing price for Shaw shares was up 1.5% to C$38.25. Rogers shares increased by 1.4% to settle at $62.43.