Rogers-Shaw Deal Could Drag into Mid-2023, Says Analyst
Rogers’s proposed $26 billion acquisition of Shaw Communications currently hangs in the balance at an upcoming trial against the Competition Bureau, and one industry expert believes the deal could stretch into mid-2023 — reports BNN Bloomberg.
“The odds are increasing that it will take a full trial, and possibly a further appeal, before we get a clear view on the outcome of that transaction,” Maher Yaghi, an analyst at the Bank of Nova Scotia, said in a report on Tuesday.
Yaghi added that Rogers and Shaw may not be able to close the deal until the middle of 2023, “unless there is a break in the stalemate in the next few weeks when politicians return to Ottawa after their summer break.”
The Competition Bureau petitioned the federal competition tribunal to block the Rogers-Shaw union in May over concerns it would increase wireless and internet prices across Canada and decrease competition.
Both sides are set to meet in tribunal hearings scheduled for November after attempts at settling the matter outside of court failed.
Competition Commissioner Matthew Boswell scored a small win earlier this week when the Tribunal ruled that questions pertaining to the nationwide Rogers network outage in July would be permitted at the merger hearings.
Rogers’s original finish line for its Shaw takeover was in the first half of this year. The two telcos have since extended their mutual merger deadline to December 31, 2022. Meanwhile, Rogers has asked its lenders to extend their deadline for the Shaw acquisition to December 31, 2023.
Rogers and Shaw previously agreed to sell the latter’s wireless business, Freedom Mobile, to Quebecor in an attempt to curry regulatory favour for their merger. Yaghi went on to note that approving the Rogers-Shaw union with the Freedom sale is the feds’ best shot at preserving wireless competition with four national players.
“We see [Quebecor unit] Videotron as best positioned to push the government’s fourth national wireless competitor agenda forward,” he said.
“The Competition Bureau continues to argue that a fourth national wireless service provider needs to have strong economics to sell wireless and wireline bundled services, and not just wireless, to remain viable.”
However, the Bureau maintains that the proposed Freedom sale “is not an effective remedy.”
The Ministry of Innovation, Science and Economic Development (ISED) is also yet to approve the Rogers-Shaw merger.