Rogers Communications Inc. and Shaw Communications Inc. agreed not to close their $20 billion deal until antitrust problems are dealt with and said they’re working to negotiate a solution to Canadian regulators’ concerns.
The companies agreed to a temporary injunction on completing the merger. That removes one possible scenario — that they would attempt to close the deal and then engage in a protracted court battle with Canada’s Competition Bureau, which is trying to block it.
Instead, Rogers and Shaw will either have to negotiate a settlement with the bureau or defeat it in an expedited hearing at the Competition Tribunal, a body similar to a court that hears antitrust cases. The side deal with the competition watchdog “allows the parties to focus on addressing the commissioner’s concerns with the transaction in order to reach a settlement,” Rogers and Shaw said Monday in a news release.
Toronto-based Rogers has been trying to acquire Shaw for $40.50 a share in what would be one of the largest mergers in Canadian history. The company has tried to solve antitrust complaints by selling Shaw’s Freedom Mobile division to a suitable buyer, but the bureau argued that’s an inadequate solution to maintain competition.
“As part of an agreement that will be registered with the Tribunal, Rogers has also agreed not to enforce any condition in its agreement with Shaw, or any other agreement entered into in connection with the proposed merger that limits Shaw’s ability to operate, maintain, enhance or expand its wireless business,” the Competition Bureau said in a statement.
The antitrust agency filed the case to block the proposed acquisition in early May, saying it’s worried that consumers “are likely to pay higher prices” after the deal.
The regulator alleged that “removing Shaw as a competitor threatens to undo the significant progress that it has made introducing more competition into an already concentrated wireless services market,” where Rogers, Telus Corp and BCE Inc. serve about 87 per cent of Canadian subscribers.