Competition Tribunal clears path for Rogers-Shaw merger

OTTAWA — The Competition Tribunal has dismissed an application from Canada's competition watchdog seeking to block Rogers Communications Inc.'s proposed $26-billion purchase of Shaw Communications Inc., clearing a path for the deal to go ahead.

It still requires approval from Innovation, Science and Economic Development Canada.

In a summary of its decision released Thursday, the Tribunal says the merger of the two telecommunications companies would not result in materially higher prices.

The deal, which includes the sale of Shaw-owned Freedom Mobile to Quebecor-owned Videotron Ltd., would not likely prevent or lessen competition substantially, the decision said.

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

Concerns that Bell and Telus -- the closest competitors to Rogers in Canada's telecom market -- would be unable to compete with the combined company were also dismissed.

"The Tribunal has also determined that the strengthening of Rogers’ position in Alberta and British Columbia, combined with the very significant competitive initiatives that Telus and Bell have been pursuing since the Merger was announced, will also likely contribute to an increased intensity of competition in those markets," the decision reads.

The Tribunal says a more detailed decision will be released in the next two days.

The Competition Bureau Canada responded late Thursday to the decision.

“I am very disappointed that the Tribunal is dismissing our application to block the merger between Rogers and Shaw," Matthew Boswell, Commissioner of Competition, said in a brief statement. "We are carefully considering our next steps."

The Competition Tribunal held four weeks of hearings to discuss concerns about the proposed deal earlier this year.

Throughout the hearing, the Competition Bureau argued the merger would lessen competition in the telecom market, trigger higher prices and lead to poor service.

Rogers and Shaw argued the deal would enhance competition and be better for consumers.

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

The deal's current closing date of Dec. 31 is just days away, though the parties have the option to extend through the end of January if needed.

This report by The Canadian Press was first published Dec. 29, 2022.

Companies in this story: (TSX:BCE, TSX:RCI.B, TSX:T, TSX:SJR.B)

The Canadian Press