OTTAWA – Eastlink parent Bragg Communications has shelved plans to acquire Ontario's Bruce Telecom after failing to receive approval from the Competition Bureau.
In an announcement Friday, the Bureau said that had Eastlink's acquisition of Bruce Telecom proceeded as proposed, “it would have likely resulted in a substantial lessening or prevention of competition in the towns of Port Elgin and Paisley”, where the two companies compete. As a result, the two parties “ultimately decided to abandon the proposed transaction”, reportedly valued at $24 million.
Both companies are facilities-based providers of telecommunications services, including wireline telephone, broadband Internet and television, within Bruce County in southwestern Ontario. Halifax-based Eastlink currently owns and operates more than 500 cable systems in seven provinces, while Bruce Telecom, which is owned by the Municipality of Kincardine, is the incumbent telco for much of Bruce County, including Kincardine, Tiverton, Port Elgin and Paisley and their surrounding rural areas.
"Our review concluded that Eastlink's acquisition of Bruce Telecom would have likely resulted in higher prices and fewer choices for the supply of telecommunications services to the residents of the towns of Port Elgin and Paisley”, said Commissioner of Competition, John Pecman, in a statement. “In the absence of the dynamic rivalry that exists between Eastlink and Bruce Telecom, customers would also have been deprived of the benefits of innovation in their telecommunications services."
When contacted by Cartt.ca, an Eastlink spokesperson said the company was disappointed with the decision but remains “fully committed to our customers and operations in this region”.
“Unfortunately, the purchase of Bruce Telecom by Eastlink will not proceed as it did not receive the required approvals by the Competition Bureau”, reads the spokesperson’s emailed statement. “As a result, Eastlink has withdrawn from the transaction. We are very disappointed as our plans were to begin investing immediately to provide improved products and services to the customers of Bruce Telecom.”
