Two Canadian telcos put brakes on mega-merger

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Rogers And Shaw
Rogers And Shaw
Spining

Two telcos in Canada, Rogers Communications and rival Shaw Communications have placed a proposed merger on hold while the pair attempt to negotiate a settlement with the country’s competition authority to ward off any threat of a court injunction. 

In a statement Rogers Communications maintained its belief a takeover of Shaw Communications was in the best interests of consumers despite the delay, noting arguments around job creation and investment in digital infrastructure.

During the pause in the process Shaw Communications will press on with plans to sell its wireless arm, a move designed to appease authorities and quell any competition concerns.

The decision came ahead of Canada’s Commissioner of Competition Matthew Boswell’s tribunal hearing to request an interim injunction, which has now been put on hold. The authority ultimately aims to block the deal.

Rogers Communications noted the agreement to hold the takeover process “allows the parties to focus on addressing the Commissioner’s concerns with the transaction in order to reach a settlement”.

In its statement announcing its blessing for the interim injunction, the competition bureau said its opposition to the deal was “in an effort to protect Canadians from higher prices, poorer service quality and fewer choices, particularly in wireless services”.

Should negotiations fail the matter will go to a tribunal for a final ruling.

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