Competition Tribunal clears the way for Rogers-Shaw merger to go ahead

The Competition Tribunal has dismissed an application from Canada’s competition watchdog seeking to block Rogers Communications’ proposed $26-billion purchase of Shaw Communications, clearing a path for the deal to go through.

It still requires approval from Innovation, Science and Economic Development Canada.

In a summary of its decision released Thursday, the tribunal says the merger of the two telecommunications companies would not result in materially higher prices.

The decision says the deal, which includes the sale of Shaw-owned Freedom Mobile to Quebecor-owned Videotron, would not likely prevent or lessen competition substantially.

Quebecor agreed to buy Freedom Mobile in a $2.85-billion deal earlier this year.

More detailed decision to come

Concerns that Bell and Telus — the closest competitors to Rogers in Canada’s telecom market — would be unable to compete with the combined company were also dismissed.

“The tribunal has also determined that the strengthening of Rogers’ position in Alberta and British Columbia, combined with the very significant competitive initiatives that Telus and Bell have been pursuing since the merger was announced, will also likely contribute to an increased intensity of competition in those markets,” the decision reads.

It says a more detailed decision will be released in the next two days.

Matthew Boswell, the commissioner of competition for the federal Competition Bureau, issued a statement Thursday evening, saying, “I am very disappointed that the tribunal is dismissing our application to block the merger between Rogers and Shaw. We are carefully considering our next steps.”

The Competition Tribunal held four weeks of hearings to discuss concerns about the proposed deal earlier this year.

Throughout the hearing, the Competition Bureau argued that the merger would lessen competition in the telecom market, trigger higher prices and lead to poor service.

Rogers and Shaw argued that the deal would enhance competition and be better for consumers.

Earlier this year, Industry Minister François-Philippe Champagne said he would not allow Rogers to acquire all of Shaw’s wireless licences, suggesting the final approval for the merger required concessions, including the sale of Freedom Mobile.

The deal’s current closing date of Dec. 31 is just days away, although the parties have the option to extend it through the end of January if needed.

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