OTTAWA — The regulatory fight over the $26-billion proposed merger between Rogers Communications Inc. and Shaw Communications Inc. is headed to public hearings after the Competition Bureau doubled down on its intention to block the deal during a case management conference on Tuesday.
The Competition Bureau reiterated its position that the planned sale of Shaw-owned wireless carrier Freedom Mobile to Quebecor Inc.'s Videotron Ltd. is not enough to eliminate its concerns that the merger would lead to worse services and higher prices for consumers.
Freedom competes with Rogers in large parts of Ontario and Western Canada, and its sale was widely seen as necessary to gaining approval for the Rogers-Shaw merger.
Rogers and Shaw said the Competition Bureau is "attacking a non-existent transaction," noting that Freedom would be sold to Videotron before the acquisition of Shaw occurs and that the original deal is no longer relevant.
Chief Justice Paul Crampton, head of the Competition Tribunal panel for the upcoming hearings, wants to narrow the parameters to focus on the proposed acquisition of Freedom by Videotron and on Rogers' acquisition of the rest of the Shaw business.
Quebecor agreed to buy Freedom in a $2.85 billion deal earlier this year.
The sale of Freedom Mobile to Videotron would see Quebecor buy all of Freedom's branded wireless and internet customers as well as all of Freedom’s infrastructure, spectrum and retail locations in a move that would expand Quebecor’s wireless operations nationally.
In a separate decision last week, Industry Minister François-Philippe Champagne put new conditions on the deal, specifically targeting the sale of Freedom to Videotron.
Champagne – who as Minister of Innovation, Science and Industry must approve any spectrum licence transfer – left the door open to a revised agreement, saying he had two major stipulations.
He said Videotron would have to agree to keep Freedom's wireless licences for at least 10 years.
He also said he would "expect to see" wireless prices in Ontario and Western Canada lowered by about 20 per cent, putting them in line with Videotron's current Quebec offerings.
In response, Quebecor said it would accept the conditions, agreeing to incorporate them in a revised deal.
Rogers is hoping to close the Shaw deal by the end of the year, with a possible further extension to Jan. 31, 2023. The closing date has been delayed several times since the deal was first announced in March 2021.
Earlier this year, the CRTC approved Rogers' acquisition of Shaw's broadcasting services subject to certain conditions, but the deal still needs the green light from both the Competition Bureau and Innovation, Science and Economic Development Canada.
Competition Bureau approval will be decided by the outcome of the Competition Tribunal hearing, which is scheduled to begin on Nov. 7.
This report by The Canadian Press was first published Nov. 1, 2022.
Companies in this story: (TSX:RCI.B, TSX:SJR.B, TSX:QBR.B)
The Canadian Press
