TORONTO and CALGARY – Rogers Communications and Shaw Communications released a joint statement today indicating the early mediation with the Commissioner of Competition that took place earlier this week on Monday and Tuesday did not end in a resolution to the Commissioner’s objections to the proposed merger of the two companies.
“Rogers and Shaw intend to continue to work constructively with the Commissioner to highlight the many benefits of the merger to all Canadians, including maintaining a strong and sustainable fourth wireless carrier across Canada through the proposed divestiture of Freedom Wireless to Quebecor Inc.,” the statement says.
This news means the review process at the Competition Tribunal will continue. (In May, the Commissioner of Competition asked the tribunal to block the proposed merger.)
A scheduling order for an expedited process was made public last month, which allows for a five-week hearing starting Nov. 7, 2022. However, the hearing can still be avoided if Rogers, Shaw and the Commissioner of Competition reach a resolution beforehand.
Should a resolution not be reached, the Attorney General of Alberta may participate in the proceedings.
Yesterday, the Competition Tribunal posted a notice of intervention by the Attorney General of Alberta on its website, indicating the AG is not taking a position on the merger at this time, but still “reserves its right to participate after the parties have exchanged materials throughout the course of these proceedings.” (Should the matter be resolved between Rogers, Shaw and the commissioner, however, the AG will not have the chance to intervene.)
The merger of Rogers and Shaw was announced over a year ago and has passed the original outside date for closing (March 15, 2022) and an updated date (June 13, 2022). The current outside date for closing the transaction is July 31, 2022. This date was announced in May and remains unchanged at this point.
The merger requires several approvals, which are taking more time than was evidently anticipated.
The CRTC approved the transfer of control of Shaw’s licenced broadcasting undertakings to Rogers in March of this year. Two consumer advocacy groups petitioned Cabinet to set aside the decision or refer it back to the CRTC, but Cabinet declined to consider the request.
Rogers and Shaw are still waiting for approvals from ISED and the Competition Bureau. At issue is Shaw’s wireless assets.
In March, Minister of Innovation, Science and Industry François-Philippe Champagne said he would not allow Rogers to acquire all of Shaw’s wireless assets, while the Commissioner of Competition argued in an application to the Competition Tribunal in May that the merger will worsen the state of competition in the Canadian wireless market.
In response to Champagne’s statement, Rogers set out to sell Shaw’s Freedom Mobile – a process that ended in the company coming to an agreement for its sale to Quebecor. If this remedy is approved, Rogers would still get Shaw Mobile in the merger.
If ISED determines the sale of Freedom to Quebecor is acceptable (which we believe it will), this will presumably be enough for the department to approve the merger of Rogers and Shaw as Champagne’s statement indicates an objection to the transfer of all of Shaw’s wireless assets to Rogers but left room for the possibility some of the assets could be transferred.
The Commissioner of Competition, however, indicated in a filing last month the sale of Freedom would not be enough to outweigh the negative effects he argues the deal will have on competition.
The commissioner argued the sale of just Freedom “will not replace the significant and growing competition Shaw Mobile was delivering and would continue to deliver in Alberta and British Columbia, and it would make Freedom Mobile a substantially weaker competitor than it would have been but for the Proposed Transaction.”
