The Competition Bureau has expanded its appeal of the Competition Tribunal’s decision giving the go-ahead to Rogers Communications Inc.’s RCI-B-T proposed $20-billion takeover of Shaw Communications Inc. SJR-B-T, adding two claims of legal error to its initial arguments.
The bureau will face off against Rogers and Shaw at the Federal Court of Appeal on Jan. 24, just one week before the Jan. 31 takeover deadline set by the companies.
The tribunal is a quasi-judicial body that adjudicates cases brought by the bureau, an independent law-enforcement agency that seeks to ensure competition in Canada.
The proposed takeover includes the divestiture of Shaw’s Freedom Mobile to Quebecor Inc. QBR-B-T to bolster competition in the wireless market. The bureau is arguing that the tribunal should have first considered the deal between Rogers and Shaw alone instead of considering the divestiture alongside the original deal. But the tribunal ruled that, even if it had analyzed the merger as the bureau wanted, it would have made the same decision.
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In its updated appeal, filed with the court late Friday, the bureau claimed the tribunal did not adequately explain why its decision would be the same and therefore made a legal error.
It also claimed the tribunal improperly applied the legal test for mergers, as it did not consider the magnitude of service price increases and failed to consider the duration and scope of the effects of the merger.
In its initial appeal filed Dec. 31, two days after the tribunal released its summary decision, the bureau argued that the tribunal made two legal errors: it acted outside its jurisdiction by considering the divestiture of Freedom Mobile alongside the original deal, and it did so without the bureau’s consent.
The bureau declined to comment on its amended appeal.
In a note to investors, Scotiabank analyst Maher Yaghi said the additional arguments are unlikely to sway the judge, as the tribunal would not have made assertions about its decision without being able to justify them.
“Overturning this decision is not easy, and hence we continue to believe that closing of the transaction is the most likely outcome,” Mr. Yaghi said.
The bureau is required to file its factum, or written arguments, by Jan. 13, and the companies must file their arguments by Jan. 17.
Irene Galea