Rogers and Shaw Downplay Merger Concerns to Competition Bureau

Rogers and Shaw believe the Competition Bureau should stop opposing their proposed $26 billion merger and maintain that the Freedom Mobile sale should satisfy the regulator’s antitrust concerns — reports The Globe and Mail.

In documents filed with the federal Competition Tribunal on Tuesday, the pair of telcos asserted the benefits of their union while arguing that the Bureau’s resistance comes from a lack of understanding about their business.

Rogers and Shaw have agreed to sell the latter’s wireless unit, Freedom Mobile, to Quebecor for $2.85 billion CAD in hopes of winning the Bureau’s approval. However, Commissioner of Competition Matthew Boswell has insisted that the takeover should not go through regardless of whether the companies divested Freedom.

Boswell has said that no buyer would offer Freedom the same level of financial or technical support as Shaw.

The Competition Bureau in May petitioned the federal Competition Tribunal to block the deal, citing concerns the resulting company would increase prices and decrease consumer choice. Attempts at settling the matter outside of court have failed, and the two sides appear to be headed toward a trial before Canada’s merger court.

Rogers said in Tuesday’s filings that Freedom would be able to better compete with national carriers like Bell, Telus, and itself under the Quebecor umbrella due to the Montreal-based company’s “history as a disruptive competitor” and ownership of 5G spectrum.

However, everyone from fellow telecom operators to industry experts sees the Freedom sale differently.

Rogers added that the Freedom acquisition offers a “fast, efficient and effective” vehicle for Quebecor’s longstanding plans for nationwide expansion. Freedom brings with it more than 1.7 million customers in Ontario, Alberta, and British Columbia.

Rogers noted in a previous filing that the Competition Commissioner’s argument that Freedom Mobile’s ability to compete is “vigorously” dependent on leveraging other Shaw services is fundamentally incorrect since Shaw operates Freedom as a standalone business.

“There is little relationship between Freedom and Shaw’s wireline business, and that relationship is conducted on arm’s-length commercial terms,” Rogers said.

According to Rogers, “the significant majority” of its planned Shaw acquisition — absorbing Shaw’s wireline business into its own wireline and media business — will have no anti-competitive effect as the two companies do not compete in these areas.

Rogers will still get Shaw Mobile, which has close to half a million subscribers, under the current terms of the merger.

The Shaw deal also awaits approval from the Ministry of Innovation, Science and Economic Development (ISED). Rogers earlier this week asked lenders to extend the deadline for the Shaw acquisition in preparation for the possibility that it might drag into next year.