Quebecor is looking to join forces with Rogers and Shaw Communications in their ongoing battle against the Competition Bureau for approval of their planned $26 billion CAD merger, according to a motion filed on Friday (via The Financial Post).
If the motion passes, Quebecor’s cable and wireless operator, Videotron, will be able to argue in favour of the Rogers-Shaw deal.
Rogers’s planned takeover of Canada’s fourth-largest telecom is being held up by the country’s antitrust watchdog and the Ministry of Innovation, Science and Economic Development (ISED) Canada. Both institutions believe the deal, in its current form, threatens to reduce wireless competition and inflate prices.
The Competition Bureau last month petitioned the federal Competition Tribunal to block the deal outright. Its stance on the merger hasn’t changed despite Rogers and Shaw having agreed to sell the latter’s wireless business, Freedom Mobile.
Quebecor now has skin in the game as well, given it’s on the other side of the $2.85 billion Freedom Mobile sale. The acquisition will jumpstart Quebecor’s longstanding plans to expand nationally.
In the motion it filed with the tribunal, Quebecor said it could demonstrate how the Freedom Mobile sale could preserve and nurture wireless competition. The company offered to present evidence of its plans to leverage the Freedom purchase to create “aggressive competition” outside its home province (and primary market) of Quebec.
“The divestiture allows Videotron to fulfill its long-standing ambition to expand outside of Québec and operate as Canada’s fourth national wireless carrier,” Jean-François Lescadres, Videotron’s Vice President of finance, wrote in an affidavit.
Lescadres added that blocking the deal would deprive both his company and the Canadian wireless industry of a “transformational transaction.”
Rogers and Shaw held mediation talks with Competition Commissioner Matthew Boswell earlier this week, but the two sides failed to resolve their differences. The matter will now proceed to trial, although an out-of-court settlement is not out of the question.
After Rogers suffered a major network outage that spanned up to 24 hours and beyond for some customers, critics have cited a merger with Shaw would be a bad idea, as it would put even more customers under the Rogers umbrella.
