The July deadline is looming for the closure of Rogers Communications’ takeover of Shaw Communications. Canada's antitrust authority, Rogers, and Shaw will be meeting to discuss possible solutions to the disputed C$20 billion ($15.5 billion) takeover.
If the merger falls through, Rogers will have to pay Shaw a breakup fee of C$1.5 billion.
According to Finish consultancy firm ReWheel, telecom rates in Canada are the most expensive in the world, and thus the regulator has decided to block the deal, saying it would significantly lessen competition in the country.
What has given the regulator pause is Shaw’s wireless business. The competition bureau does not like that Rogers has agreed to sell Freedom Mobile, one of Shaw's cellular businesses, to Montreal-based Quebecor.
While the bureau is concerned about the potential impact the merger could have on competition, it has said that that alone would not be enough to address the antitrust concerns. The bureau is also expected to seek the divesture of Shaw Mobile, a separate cellular business that was launched in 2020, Reuters reported in June.
Even if the competition bureau does sign off on the merger, the companies will need to get the approval of Canada's ministry of Innovation, Science, and Economic Development (ISED). According to Laurie Bouchard, an ISED spokesperson, they have not yet received the companies’ formal application, but when they do, the minister will review the deal on its merits.
Under mediation, a tribunal judge will hear both the bureau and the companies’ arguments. In the event of a disagreement, the judge could offer nonbinding solutions to settle the dispute. If the parties then decide to reject the solutions, the dispute will enter the trial phase, which could last until the end of the year.
