Canadian telecoms operator Quebecor Inc QBR-B-T is seen as a credible buyer for Shaw Communications’ SJR-B-T Freedom Mobile wireless business, a federal government source said on Wednesday, an option that could help pave the way for the approval of Rogers Communications’ RCI-B-T bid for Shaw.
Canada’s Competition Bureau has blocked Rogers’ $20-billion bid for Calgary-based Shaw, saying it would undermine competition in a country that already has some of the world’s highest wireless rates.
Toronto-based Rogers asked Quebecor, a Montreal-based telecommunications and media company, to bid for Shaw’s wireless business, the Globe and Mail reported on Friday, the same day that Rogers and Shaw said they had been informed the competition watchdog would block the merger.
“Quebecor is a credible potential buyer of Freedom Mobile,” a government source, who was not authorized to speak on the record, told Reuters.
“If it (Quebecor) were to buy Freedom Mobile, the government would consider the Rogers-Shaw merger on its merits, especially if it ensured competition and more affordable cell plans for Canadians.”
Quebecor declined to comment.
The competition watchdog said on Tuesday that concessions offered by Rogers to acquire Shaw were insufficient and that the merger, as proposed, would undermine competition.
The companies can now seek a compromise with regulators.
“Rogers and Shaw have 45 days to file a response,” the Competition Bureau said. “Once the parties file a response ... the Bureau has 14 days to reply. All other timelines are determined on a case-by-case basis.”
On Monday a Rogers spokesperson said the company would “continue to engage constructively with regulators to reach a resolution” and that it would file a formal response “in due course.”
A consortium that includes the family that owns the National Hockey League’s Vancouver Canucks, a pension plan and British Columbia indigenous groups have made an offer for Freedom Mobile, the Globe and Mail reported on Tuesday.
The Rogers-Shaw merger would create Canada’s second-largest cellular and cable operator.
The deal requires approval from the telecommunications commission, Canada’s Ministry of Innovation, Science and Economic Development, and the Competition Bureau.
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