Competition Tribunal hearings for Rogers’s proposed $26 billion acquisition of Shaw Communications officially kicked off today, with the Competition Bureau re-cementing its desire to block the union (via Global News).
The Bureau is opposing the Rogers-Shaw merger on the grounds that it will decrease competition and increase prices. During Monday’s hearing, Canada’s competition watchdog reiterated that the proposed sale of Shaw-owned Freedom Mobile to Quebecor is not enough to alleviate its antitrust concerns.
According to the Competition Bureau, Freedom will not be able to compete effectively if separated from Shaw. It believes that certain shared human resources and synergies the company “has enjoyed” as part of Shaw are integral to its ability to compete.
The Bureau added that Freedom’s divestiture to Quebecor would not replace the “vigorous” competitive presence offered by Shaw.
Quebecor’s wireless unit, Vidéotron, has agreed to purchase all of Freedom’s wireless and internet customers, along with related infrastructure, spectrum, and retail locations in a move that would jumpstart Quebecor’s longstanding plans to expand its cellular service nationally. However, the Bureau noted that Rogers will still acquire Shaw Mobile’s cellular customers and infrastructure from the deal.
Rogers pushed back against the Bureau’s stance in its opening arguments. The company said the Bureau’s view of the Freedom sale is “very far from reality.” Rogers also accused the regulator of underestimating Vidéotron’s “capacities and abilities” and overlooking its success in Quebec.
Shaw, in its opening arguments, similarly disputed the Bureau’s claims. Canada’s fourth largest telecom operator argued that the Rogers deal is “pro-competitive” and the Bureau’s attempts to prevent it are a “dramatic overreach.”
Last week, Shaw called the Bureau “stubborn and intransigent” for its protracted opposition to the merger.
Canada’s Competition Commissioner is the last holdout for approval of the Rogers-Shaw merger. The CRTC rendered its approval of the deal back in March. Meanwhile, Innovation, Science and Industry (ISED) Canada Minister François-Philippe Champagne reaffirmed his approval, contingent on the Freedom Mobile sale, last month.
Tribunal hearings between Rogers-Shaw and the Competition Bureau are expected to go on for at least four weeks, with oral arguments scheduled for mid-December.
