Canada’s Commissioner of Competition plans to oppose Rogers Communications Inc.’s $26-billion takeover of Shaw Communications at the Competition Tribunal, the telecom companies said in a combined statement issued shortly after midnight on Saturday morning.
Rogers and Shaw said they in turn plan to oppose the anticipated application by the commissioner, Matthew Boswell. The companies said they were notified of his intention to file the application on Friday afternoon, after the close of trading.
Rogers and Shaw, as well as the Shaw family trust, have agreed to extend the takeover deadline from June 13 to July 31. If the deal succeeds, it would combine two of the country’s largest cable networks.
“Rogers and Shaw remain committed to the transaction, which is in the best interests of Canada and Canadians because of the significant long-term benefits it will bring for consumers, businesses and the economy,” the companies said in their statement. “The companies have offered to address concerns regarding the possible impact of the transaction on Canada’s competitive wireless market by proposing the full divesture of Shaw’s wireless business, Freedom Mobile.”
The statement added that the companies are currently engaged in the process of selling Freedom Mobile, Canada’s fourth-largest wireless carrier.
The Globe reported on Friday that bankers representing Toronto-based Rogers have reached out to Quebecor Inc.’s bankers to discuss the sale of Freedom, which has roughly two million wireless customers in Ontario, Alberta and B.C., and has been credited with driving down cellphone bills in recent years.
Although Quebecor president and chief executive officer Pierre Karl Péladeau has made his interest in acquiring Freedom known since the merger was first announced in March, 2021, the company was, until recently, absent from the negotiations.
Stonepeak Infrastructure Partners, a New York-based global private equity firm that owns rural internet provider Xplornet Communications Inc., was among the bidders for Freedom, as was the Aquilini family, which owns the NHL’s Vancouver Canucks, The Globe has previously reported.
Globalive Capital’s Anthony Lacavera, who has offered Rogers $3.75-billion for Freedom, has urged Ottawa to consider the sale process a “non-competitive sham.”
In a letter sent in March to Mr. Boswell, Industry Minister François-Philippe Champagne and the Prime Minister’s Office, Mr. Lacavera, Globalive’s chairman and the founder of Freedom, accused Rogers of running a “closed and secretive sales process” unlikely to result in the wireless carrier emerging as a strong fourth player.
In their Saturday statement, Rogers and Shaw outlined the benefits of the takeover deal, which the companies said would include a $2.5-billion investment to build out 5G networks in Western Canada over the next five years, as well as a $1-billion fund to connect rural, remote and Indigenous communities.
The deal requires separate approval from Innovation, Science and Economic Development Canada. The companies said in their statement that they are working towards securing that clearance. The Canadian Radio-television and Telecommunications Commission has already approved the takeover, with some conditions.
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