Rogers Communications Inc.’s RCI-B-T contested $26-billion takeover of Shaw Communications Inc. SJR-B-T will head to mediation next month as the two telecoms seek to avoid a lengthy Competition Tribunal hearing.
The tribunal said on Friday that Rogers, Shaw and the Competition Bureau have agreed to participate in mediation. The process, in which an individual judicial member of the tribunal will work with the parties toward a settlement, is scheduled for July 4 and 5.
The Competition Bureau is attempting to block the merger of Canada’s two largest cable companies, arguing that the deal would lead to higher prices, poorer service and fewer choices for consumers, particularly for wireless services.
Rogers has struck a deal to sell wireless carrier Freedom Mobile to Quebecor Inc., which owns Montreal-based cable company Videotron Ltd., for $2.85-billion to address those concerns. Freedom is Canada’s fourth-largest carrier, with 1.7 million customers in Ontario, Alberta and B.C., and has been credited with reducing wireless prices in recent years.
However, Rogers plans to acquire 450,000 Shaw Mobile customers in Western Canada, who receive discounted wireless services bundled with their cable and internet. Rogers CEO Tony Staffieri has told analysts that Quebecor did not want to bid on the Shaw Mobile division because it was concerned it could not retain those customers without the same bundle. (Quebecor does not offer cable or internet service in Alberta and B.C., where the Shaw Mobile customers are located.)
There is no guarantee that the mediation process will result in a settlement. During the process, the parties will first exchange mediation briefs summarizing the situation and proposing a resolution. They will then participate in a premediation conference to discuss the mediation schedule and other matters.
The mediator will be in control of the process, including communicating with the parties and scheduling either separate or joint meetings. If a resolution is reached, it will be formalized in a consent agreement and will be binding.
The merger also requires approval from the Ministry of Innovation, Science and Economic Development, which oversees the transfer of wireless licenses.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.